With the self-assessment deadline a couple of weeks away, parents who need to file a tax return for Child Benefit need to register now!
HM Revenue & Customs has urged high-earning parents to register to complete their self-assessment tax returns online immediately, with the tax return deadline just a couple of weeks away.
Due to recent changes to Child Benefit, many parents will need to complete a self-assessment tax return for the very first time.
The Child Benefit changes
Until last year Child Benefit was a universal benefit. That is to say that anyone with children received it, irrespective of their financial situation. However, in an effort to cut costs the Government has reduced the number of people who are eligible to be paid it in full.
For those earning between £50,000 and £60,000, there is now a tax charge is 1% of the Child Benefit paid for every £100 of income earned between £50,000 and £60,000. For those earning more than £60,000, the tax charge is 100% of the benefit.
Many parents earning over £60,000 have now opted out of receiving Child Benefit. But if you haven't, you'll need to complete a tax return.
Gov.uk has a useful Child Benefit tax calculator that you can use to word out how much tax you will need to pay on your Child Benefit.
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Self-assessment tax returns
[SPOTLIGHT]Parents who have chosen to carry on receiving their Child Benefit payments have to fill out a self-assessment tax return to cover the tax due on the benefit for the 2012/13 tax year.
The deadline is 31st January for self-assessment tax returns to be sent to the taxman online. But if this is your first time doing so you really need to register now as it can take a while for HMRC to post the Activation Code you need to complete your tax return online.
For a full guide to getting your tax return sorted successfully, read How to get your online self-assessment tax return right.
What if I miss the deadline?
If you submit your tax return late you’ll be hit with an immediate £100 fine. If the return is more than three months late there is a £10 daily charge for up to 90 days, taking your total fine to £1,000.
After six months a further penalty of 5% of the tax due or £300, whichever is greater, is levied. Should you reach 12 months there’s another 5% or £300 charge, whichever is greater.
In other words, late tax returns can cost an absolute fortune. So don’t delay. Head to the HMRC website now to register.
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