Tens of thousands of child benefit recipients need to register for self-assessment by 5 October or face a penalty from HM Revenue & Customs (HMRC).
Self-assessment is necessary for households where one of the parents has an income over £50,000 but continues to receive child benefit payments. Parents face penalties of up to 100 per cent of the tax that they owe if they register late. However, if they have not registered by 31 January 2014 then extra penalties above the tax liability will apply.
The majority of people receive their salaries after tax has been deducted through the Pay As You Earn (PAYE) system, so there would have been no need for them to complete a tax return previously. Having registered for self-assessment, parents will need to complete their tax return and pay any tax by 31 January 2014. Failure to pay tax on time can incur an initial £100 fine, followed by additional penalties totalling £1,600 over the year.
If you want HMRC to include the High Income Child Benefit Charge in your tax code rather than paying it separately, you need to send in your return online by 30 December 2013.
Nimesh Shah, a senior manager with London chartered accountants Blick Rothenberg, says: "Having to complete a tax return may not be all bad news. Higher-rate taxpayers often miss out on valuable reliefs, such as relief for personal pension contributions and charitable donations, by not claiming them with HMRC. If you now need to complete a tax return, you should include these items and claim the tax relief."
You can register for self-assessment online at: http://www.hmrc.gov.uk or telephone: 0300 200 3310.
