Friday 4 October 2013

Child benefit deadline day looms

Source BBC News@ tienganhvui.com


Baby being fedChild benefit amounts to £20.30 a week for an eldest or only child



Nearly 200,000 parents have failed to register with the UK tax authority amid government changes to child benefit.


Saturday marks the first deadline for better-off families to tell HM Revenue and Customs (HMRC) about how they want their tax affairs to be dealt with.


They can opt out of receiving child benefit or register for self-assessment so the HMRC can claw money back.


Families, including one parent with a taxable income of more than £50,000, will be affected.


They will lose some of the benefit, following the introduction of the new rules in January 2013, while child benefit has been withdrawn entirely if one parent earns more than £60,000.


Eligible families receive £20.30 per week in child benefit for their first child and £13.40 a week for any further children.


The new rules meant that this payment is reduced gradually for families where one parent is earning between £50,000 and £60,000.


HMRC has written to people who it believes have a taxable income of more than £50,000 and so need to take some action. Taxable income is earnings from employment, as well as other income such as from savings and shares.


'Leaving it late'

So far, 410,000 people have opted out of receiving child benefit, generally because they earn and will continue to earn a taxable income of more than £60,000 and therefore would not be entitled to the payment.


Another 490,000 people have registered for self-assessment, which means that they would need to complete a tax return online by the end of January. They receive the total amount of child benefit, but then repay some of it in tax.


That leaves 195,000 people who need to take one of the two options - to register for self-assessment or opt out of receiving child benefit.


In theory, the deadline to register and avoid a possible penalty is 5 October. The penalty would be between 10% and 100% of the child benefit paid.


However, HMRC says it is unlikely that anyone who registers and pays the tax by 31 January would be penalised.


"HMRC is committed to helping people pay the right amount of tax and urges parents who have been affected by the changes to child benefit to register for self-assessment," said Lin Homer, HMRC chief executive.


"We know that lots of people leave it until the last minute."





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