UK taxpayers facing fines for failing to repay Child Benefit

Back in 2013, Chancellor George Osborne introduced the High Income Child Benefit Charge, requiring anyone earning a net adjusted income above £50,000 p.a. to repay some of the Child Benefit received.

Those earning above £60,000 p.a. are not entitled to receive any Child Benefit (CB) and should repay it in full.

To pay the CB tax charge, you will need to

  • register for Self Assessment
  • complete & submit a Self Assessment Tax Return each year
  • pay what you owe

Since the CB tax charge was introduced, HMRC has imposed fines of £19m on families failing to declare and repay amounts received. Due to widespread ignorance of the tax charge, HMRC was forced to hand back almost £2m in fines and is now seeking to address the issue.

Says Julia Gallagher, tax partner at Curo, Chartered Accountants “Many families will have continued claiming Child Benefit as their net adjusted income has increased above the £50,000 threshold. There are two choices when this happens: continue to receive the benefit but pay it back via the Self Assessment return, or stop the Child Benefit”

With the Self Assessment filing deadline for the 2019/20 tax year almost upon us, affected taxpayers have a short window in which to try and remedy the situation.

Continues Julia “HMRC is currently writing to higher income taxpayers, making them aware of their obligations and what action they should take to avoid a fine. This time, there are no excuses for ignorance so we are urging all taxpayers with adjusted income above £50,000 to contact HMRC as soon as possible. There are often complications in assessing if any CB should be repaid, especially if the parents have separated and the rules can be confusing.”

How we can help

Clear communication with HMRC is key to resolving any tax issues and we can help you understand your obligations and liaise with HMRC on your behalf. Please get in touch if you would like guidance with your personal tax affairs and we would be delighted to assist. [email protected] or tel 01527 558539.