THE January 31 deadline for filing online self-assessment tax returns is nigh and this year hundreds of Wigan families will be affected by changes to the way Child Benefit is claimed.
From this year, parents who earn more than £50,000 a year and collect Child Benefit will have to complete a self-assessment return. HMRC estimates that around 1.2 million UK families will be caught and this means that up to this number of folk will need to include the charge on their tax return or complete a return for the first time if they are not already in self-assessment, assuming that they did not choose to stop Child Benefit by January 7 2013.
In the 2012 Budget, the Government announced a new tax charge on couples with children where one partner earns more than £50,000, with the benefit being clawed back through their self-assessment return if the parent had not elected to stop the payments.
Those earning over £60,000 will effectively not receive any benefit, because the tax will be the same as their entitlement.
Parents caught by these rules, who received child benefit between January and April 2013 will have to pay some benefit back in the form of tax. Ideally these individuals should have notified HMRC by last October, but HMRC will accept payments as long as forms are filed by January 31.
Parents can only file online self-assessment tax returns by registering with HMRC, and this involves being sent an activation code by post. As there is usually a delay between registration via the Government Gateway and receipt of an access code, a larger than average number of anticipated first time self-assessment filers could mean the system is likely to be swamped and the delay much greater.
Missing the deadlines or not paying any tax due can be expensive. In addition to a potential penalty for failure to notify, failure to file a tax return on time wil l incur an initial penalty of £100 and further penalties will be due for delays over three months (costing up to £10 a day).