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Child benefit claimants' fine risk as tax deadline looms | |
(about 9 hours later) | |
Some 110,000 higher-earning parents who receive child benefit payments face a fine if they fail to register for, and return, tax self-assessment forms. | Some 110,000 higher-earning parents who receive child benefit payments face a fine if they fail to register for, and return, tax self-assessment forms. |
The deadline for submitting online tax returns is 31 January, with 10.9 million expected to be filed to HM Revenue and Customs (HMRC) by then. | The deadline for submitting online tax returns is 31 January, with 10.9 million expected to be filed to HM Revenue and Customs (HMRC) by then. |
Many people, who face a tax charge because they receive child benefit, will be filing for the first time. | Many people, who face a tax charge because they receive child benefit, will be filing for the first time. |
Tens of thousands of them have yet to register with the deadline looming. | Tens of thousands of them have yet to register with the deadline looming. |
They face an immediate penalty of £100 if they miss the deadline. | They face an immediate penalty of £100 if they miss the deadline. |
This penalty could grow by hundreds of pounds if they fail to submit the returns during the following months. | This penalty could grow by hundreds of pounds if they fail to submit the returns during the following months. |
Benefit rule changes | Benefit rule changes |
Those eligible for child benefit receive £20.30 per week for the first child and £13.40 a week for any subsequent children. | Those eligible for child benefit receive £20.30 per week for the first child and £13.40 a week for any subsequent children. |
However, a change in the rules by the government has affected families where one parent has a taxable income of more than £50,000. | However, a change in the rules by the government has affected families where one parent has a taxable income of more than £50,000. |
If they 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. | If they 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. |
In order to do so, they must first register and then complete a self-assessment tax return by the end of January. | In order to do so, they must first register and then complete a self-assessment tax return by the end of January. |
An estimated 90% of the 1.1 million parents affected have already registered, or opted out of receiving child benefit entirely. | An estimated 90% of the 1.1 million parents affected have already registered, or opted out of receiving child benefit entirely. |
That leaves about 110,000 people who have yet to register. The process can take more than a week to complete, as they will need an activation code to be sent in the post, so HMRC has urged them to act now. | That leaves about 110,000 people who have yet to register. The process can take more than a week to complete, as they will need an activation code to be sent in the post, so HMRC has urged them to act now. |
"The registration process is easy. We know that many parents are newcomers to self-assessment, so it is really important they register and file online to avoid getting a penalty," said Lin Homer, HMRC chief executive. | "The registration process is easy. We know that many parents are newcomers to self-assessment, so it is really important they register and file online to avoid getting a penalty," said Lin Homer, HMRC chief executive. |
Chas Roy-Chowdhury, head of taxation at accountancy body, the ACCA, urged people to file as soon as possible. | Chas Roy-Chowdhury, head of taxation at accountancy body, the ACCA, urged people to file as soon as possible. |
But he added that the workload of dealing with these first-time filers had been "dumped" on HMRC which was already stretched for resources. | But he added that the workload of dealing with these first-time filers had been "dumped" on HMRC which was already stretched for resources. |
HMRC has an online calculator to allow people to check how much child benefit they need to include in their return. | HMRC has an online calculator to allow people to check how much child benefit they need to include in their return. |
Last-minute filing | Last-minute filing |
Annual tax returns are already a way of life for the self-employed and workers with more than one source of income, in order to ensure they pay the correct amount of income tax. They must file the self-assessment form for the tax year ending in April 2013. | Annual tax returns are already a way of life for the self-employed and workers with more than one source of income, in order to ensure they pay the correct amount of income tax. They must file the self-assessment form for the tax year ending in April 2013. |
Some 10.9 million returns are anticipated by the end of January deadline, up from 10.5 million last year and about 6.5 million have filed already. | Some 10.9 million returns are anticipated by the end of January deadline, up from 10.5 million last year and about 6.5 million have filed already. |
A year ago, around 578,000 people filed on the last day - 31 January - before fines were issued. | A year ago, around 578,000 people filed on the last day - 31 January - before fines were issued. |
Paper returns must have been completed and returned by 31 October, with the final 31 January deadline for online returns. Anyone who misses these deadlines faces an immediate £100 fine, even if there is no tax to pay. | Paper returns must have been completed and returned by 31 October, with the final 31 January deadline for online returns. Anyone who misses these deadlines faces an immediate £100 fine, even if there is no tax to pay. |
After three months, there are additional daily penalties of £10 a day, up to a maximum of £900 if no forms have been returned. After six months, there is a further penalty of 5% of the tax due or £300, whichever is greater. After 12 months, there is an additional 5% or £300 charge. | After three months, there are additional daily penalties of £10 a day, up to a maximum of £900 if no forms have been returned. After six months, there is a further penalty of 5% of the tax due or £300, whichever is greater. After 12 months, there is an additional 5% or £300 charge. |
HMRC will want to avoid mistakes of a year ago when 12,000 people, who were told they no longer needed to fill in self-assessment tax forms, were sent penalty notices in error. | HMRC will want to avoid mistakes of a year ago when 12,000 people, who were told they no longer needed to fill in self-assessment tax forms, were sent penalty notices in error. |
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