High earners who fail to declare child benefit by making an online tax return by 31 January will be fined £100 by HMRC.
The tax collection body has reminded child benefit recipients that they now have to pay tax on this if they earn above £50,000.
Tax on child benefit for high earners
The charge is 1% of child benefit for each £100 above £50,000 they earn. This means that someone who earns £60,000 pays 100% tax, so effectively returns all the child benefit they receive. If you are in this position, it is possible to stop receiving child benefit in the first place, but unless you opt out you will have a tax bill to pay.
In 2013-14, tax is due on child benefit received between 7 January and 5 April 2013. Child benefit received after 5 April should be declared on a 2014-15 tax return.
Self-assessment tax return deadlines
Unless you have arranged to pay the tax due on your child benefit via PAYE, the money due needs to be paid in a lump sum at the end of the tax year. In either case, you are required to make a self-assessment tax return.
The deadline for paper returns (31 October) has now passed. The deadline for an online tax return is 31 January 2014. Unless you are already a self-assessment taxpayer, you need to register with HMRC in advance and receive an activation code by post. This can take up to a week to arrive, so leaving the registration process too late can mean you miss the deadline.
HMRC Chief Executive Lin Homer said: ‘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.’
Automatic fines for late tax returns
As well as having to pay the tax they owe, those who miss the tax return deadline face an automatic fine of £100. If they delay making a tax return still further, they face additional fines.