Posted on 2 December 2013
Did you or your partner earn more than £50,000 in the year to April 2013 AND receive child benefits in 2013?
If the answer to either of those questions is “yes”, then you may have to pay back a percentage of the benefit you received.
It was widely advertised by the government that child benefits were to be withdrawn from families where one or more of the partners earn more than £60,000 a year. The details of this are more complicated and can have a far reaching impact on any family in receipt of child benefit where one parent earns more than £50,000.
Many people opted to cancel their child benefit payments; however those that did not are required to complete a self-assessment tax return as this is the method the government has chosen to claw back the benefits through.
If HMRC receives your tax return after midnight on 31st January, you will be liable for an automatic penalty so it is vital to act quickly to avoid any charges.
Jackie Hendley, Head of Tax at Smith Cooper commented: “HMRC has been paying particular attention to self-assessment tax returns and have adopted a new, tougher approach. Filling in the forms can be extremely daunting and stressful for many however it is imperative that forms are filled in correctly and on time.”
For those who received child benefit in 2013, the amount that will need to be returned depends on your income level. For an income between £50,000 and £60,000 a percentage of the benefit has to be returned, for incomes over £60,000 all of the benefit must be returned.
Jackie added: “With HMRC launching numerous targeted campaigns, we have had an increase in clients approaching us for assistance with registering, completing and filing their tax returns. The fact that so many individuals may have to pay back benefits they have received it is even more of an added stress. Once again, I’ll stress that is it vital to ensure all self-assessment forms are filled in correctly and before the 31st January.”
For advice in relation to your self-assessment or any other tax query, please get in touch with one of our experts here