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Higher-earning parents may risk an immediate £100 fine from HMRC if they fail to file a Self Assessment tax return by the deadline of 31 January 2014. 

Around 110,000 higher-earning parents, many of whom will be filing a Self Assessment for the first time, may face the tax charge because they receive child benefit.

Changes to Child Benefit

Under the new rules, families with one parent earning more than £60,000 a year will see their child benefit withdrawn completely and families with one parent earning above £50,000 will see their payments substantially reduced.  

If parents continued to receive child benefit after January 2013, then they must pay some of that back in a tax charge. If one parent has a taxable income of more than £60,000, then they must pay it all back.

Eligible child benefit claimants receive £20.30 per week for the first child and £13.40 a week for any subsequent children.

Although an estimated 90% of the 1.1 million parents affected have already registered for Self Assessment, or opted out of receiving child benefit, tens of thousands of people have yet to register.

Don’t miss the deadline

If you still haven’t filed your 2012-2013 tax return with HMRC, you will need to do it online and pay your tax liability by the end of January.

The initial penalty for late filing is £100. Under the new fines structure introduced last year, late filing penalties will apply even if people have no tax to pay or the tax owed is less than the penalty applied.

After three months, additional fines of £10 per day start to accrue. There are also additional new penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months. 

Around 10.9 million people are expected to file tax returns online with HMRC for 2012-13.

In 2013, around 578,000 people filed their tax returns on the 31 January, only narrowly avoiding a late filing penalty.

Still need to file your tax return?

The final deadline for online returns is 31 January. Paper returns must have been completed and returned by 31 October.

Online filers will need to be registered for HMRC Online Services and have a valid Activation Code, which can take a few days to arrive in the post. To register for HMRC Online services, visit: www.hmrc.gov.uk/online.

If you already file online you should not need to re-register.

Further assistance can be obtained by calling the HMRC Self Assessment helpline on 0300 200 3310 (open 8.00am to 8.00pm, Monday to Friday, and from 8.00am to 4.00pm on Saturdays) or by visiting www.hmrc.gov.uk/sa.

HMRC also has an online calculator to allow people to check how much child benefit they need to include in their return.

Foremans can help

Short of time? The team of expert tax Advisors at Foremans LLP will be happy to assist you with your query. You can contact us on 01244 625 500.