Parents on higher incomes who received Child Benefit beyond January 2013 have been urged to register for Self Assessment prior to October 5 2013 in order to avoid High Income Child Benefit Charge penalties.
Later this month, HM Revenue and Customs (HMRC) is writing to almost two million higher rate taxpayers, including those affected by recent changes to Child Benefit.
The letter will prompt taxpayers that if their annual income is beyond £50,000 and they or their partner received Child Benefit in 2012/13, they will be required to file a Self Assessment tax return for the 2012/13 tax year.
Over 390,000 taxpayers with higher incomes have already opted out of receiving Child Benefit as a result of the new Self Assessment threshold.
Lin Homer, chief executive of HMRC, said: "HMRC is committed to helping people pay the right amount of tax. If you have had certain changes to your income in the last year, including those affected by the changes to Child Benefit, you have until 5 October to register for Self Assessment."
The High Income Child Benefit Charge came into effect on January 7 2013, with taxpayers liable to pay tax if the following statements apply, or applied in the 2012/13 tax year:
you have an individual income of over £50,000 a year, and
either you or your partner received any Child Benefit payments beyond January 7 2013, and
your income for the tax year is higher than your partner’s. The partner with the higher income is liable to pay the charge if both partners have income over £50,000.
How to apply for Self Assessment
If the High Income Child Benefit Charge does apply then you must register for Self Assessment for the 2012/13 tax year by October 5 2013.
In order to inform HMRC of your change in circumstances you’ll need to fill in the online form SA1 Registering for Self Assessment and getting a tax return.