PARENTS are being urged to make a quick check on their child benefit – or risk an unexpected tax bill.
If a mum or dad is earning over £50,000, they must tell HMRC about the child benefit they get and pay a tax charge on it.
Parents are urged to register for self-assessment if they earn over a certain amount.
To avoid the fine, you need to file a tax return by January 31, 2023.
But there’s an earlier deadline this week if you’ve never done self-assessment.
First time filers must register by Wednesday, October 5.
You can find a self-assessment form here – you’ll need to complete one if you’re self-employed as well.
Around 1.6million are set to be affected by the tax charge this year – around one in five families,
After Wednesday late filings will incur a £100 fine with lengthy delays also accruing interest later on.
That’s on top of paying the high income child benefit charge (HICB) as well.
Child benefit is worth £84.60 a month for the first child – or just over £1,000 a year – and £56 a month for an extra child.
The HCBC means if either parent earns over £50,000 then they have to pay a tax charge on the benefit.
The tax charge is paid at a rate of 1% of the benefit for every £100 earned over this amount.
If either parent earns £60,000 or more the full amount must be repaid.
Someone earning £55,000 and claiming for one child would have received £1,115.65 in the previous tax year, but would have to pay £557 to cover the HICBC, according to HMRC’s child benefit calculator.
But many parents are not aware of the charge which came in from 2013.
SE has previously spoken to parents who were hit with surprise bills of thousands of pounds.
If you fail to file a self-assessment tax return you could be fined up to 30% of what you owe by HMRC.
A late filing penalty of £100 also applies and if it’s more than three months late interest
If it’s longer than that interest starts to be charged on outstanding balances.
How to register
Many parents may not have realised they have to register and pay this charge through the self assessment tax system, even if you usually get your salary through a pay as you earn scheme at work.
Anyone filing a self assessment tax return scheme for the previous tax year, from April 6 2021 to April 5 2022, needs to register with HMRC by October 5.
You can register through the Gov.uk website if you have registered before.
You’ll need to register for self-assessment online if you haven’t.
Paper tax returns must then be filed by October 31 2022, or you have until January 31 2023 to file online and pay what you owe.
If you’re registering for the first time then you may not be set up in time to file by the extended deadline – you usually have to register by the October before.
But remember if you are fined and think you shouldn’t have been you can appeal, but you should make sure to file on time to avoid this.