Tax Returns & the High Income Child Benefit Charge – 165,000 People Miss Deadline
The High Income Child Benefit Charge (HICBC) came into effect from 7 January 2013, and will affect child benefit claimants where they or their partner earn in excess of £50,000 per annum.
Figures from the BBC suggest that an estimated 165,000 people missed the 5 October 2013 deadline to register for a tax return for 2012/13
Taxpayers that missed the deadline may be liable to late notification penalties and should take action now to show willing, in terms of penalty mitigation, and to register for self-assessment.
The normal due date for the payment of the HICBC and online submission of the 2012/13 tax return is 31 January 2014 – although this may be extended to 3 months after the return is issued if this is later.
How Does the HICBC Work?
The charge operates by imposing a charge to tax to claw back any excess child benefit received.
The claw back will be tapered such that £1 of child benefit will be paid back for every £100 of income above the £50,000 threshold. Those with income of £60,000+ will be subject to a charge equal to the entire amount of child benefit received.
Who has to pay the tax?
The high income child benefit charge attaches to the higher earner of the couple – therefore couples where both partners are high earners will find that it is the higher earner of the two that is liable to pay the tax.
In many cases, the person liable to pay the tax charge will not be the same as the person receiving the child benefit.
There may be complexities where; children live with a third party such as a grandparent or couples separate during the tax year.
Other PD Tax Blogs on Related Topics
Registering for Tax Returns http://wp.me/p3gayI-4L
Do You Need to Submit a Tax Return? http://wp.me/p3gayI-4z
Tax Returns – The Importance of Disclosure http://wp.me/p3gayI-4h
Capital Gains Tax – Sale of Home but is it a Residence? http://wp.me/p3gayI-40
BBC Source referred http://www.bbc.co.uk/news/business-24432053 viewed on 7/10/13