If your net adjusted income is more than £50,000 and you or your partner are in receipt of Child Benefit, you’ll need to register for Self Assessment before 5 October.
The changes were introduced on Jan 7 2013 and from this date effectively remove Child Benefit completely from those with income in excess of £60,000 pa. Those with income between £50,000 and £60,000 will see a partial reduction in their Child Benefit, calculated on a sliding scale.
HMRC is writing to 2m higher rate taxpayers reminding them that if their income is above £50,000 or they received Child Benefit in 2012/13, they need to complete a self assessment tax return for the 12/13 tax year. They will also be required to pay the High Income Child Benefit tax charge through their tax return.
Nearly 400,000 higher income taxpayers opted out of receiving Child Benefit before 7 January and these people are not required to take any further action. A further 600,000 people are expected to be affected by the changes and are being urged to register for Self Assessment as failure to notify on time can result in a penalty.
The government has cracked down recently in a number of areas and is having considerable success in collecting overdue debts from taxpayers, both personal and corporate. ‘Failure to notify’ penalties can be levied where taxpayers fail to advise HMRC about changes which are relevant to the tax position, such as selling a major business asset, new commercial activities or becoming chargeable to tax in the first place.
HMRC will assess if there is a ‘reasonable’ excuse for failure to notify on time and where there is full disclosure and compliance, the penalty may be as low as 0% of the tax due. Conversely, where taxpayers deliberately fail to notify HMRC of their tax chargeable position and also conceal the facts, penalties can be as high as 100% of the tax due.
Curo Chartered Accountants
Curo is based near Bromsgrove, Worcestershire.