HMRC is refunding parents to the tune nearly of £2m after scrapping 6,000 child benefit penalty fines for higher earners.
Around 35,000 families were fined after failing to register for a tax charge which was introduced six years ago.
The law meant anyone earning more than £50,000 a year would have to pay back some child benefit through a self-assessment form.
After many parents complained, HMRC is now cancelling thousands of fines and refunding people who had a 'reasonable excuse' for not paying.
Which? looks at who has been affected and whether you should claim child benefit if you're a high-earner.
Child benefit is a monthly government payment to anyone who is responsible for a child to help pay for anything they need and boost your household budget.
In the 2019-20 tax year, you get £20.70 a week for one child, and an extra £13.70 for each additional child.
However, only families in which the highest paid person earns less than £50,000 get the full amount. If you earn more, you have to pay back some of your child benefit.
In 2012, HMRC ruled that anyone earning more than £50,000 would have to pay back some child benefit through a self-assessment form.
This applied if:
The tax charge equates to 1% of the child benefit paid for every £100 of income between £50,000 and £60,000.
If either you or your partner earns more than £60,000, the tax means you'll pay back your entire child benefit entitlement.
Last year, the government body wrote to 35,000 families stating they would be fined for failing to register for the tax charge in the tax years of 2013-2014, 2014-2015 and 2015-2016.
The 'failure to notify' fines sparked complaints from parents who argued they were not aware of the rule change.
HMRC has now announced following a major review that it will cancel 6,000 fines for people who had a 'reasonable excuse' for failing to state they were liable for the charge.
HMRC has issued refunds in 4,885 of 6,000 cases, totalling £1.8m.
The remainder have not yet paid the charge so do not require a refund; their fines will be automatically cancelled by HMRC.
All customers entitled to a refund will now have received one and do not need to get in touch, according to HMRC.
It is estimated the average refund was around £370 based on the number of cases and amount paid back.
A HMRC spokesperson said customers do not need to take any action and the review has concluded.
HMRC has checked all of the penalties charged and have made refunds over the last six months to customers who met the conditions for a refund.
If you are one of the 29,000 people fined by HMRC who has not had their fine wiped, you can appeal the decision.
To contact HMRC and make a complaint about the child benefit fine call 0300 200 3100.
If your partner is earning more than £60,000 a year but you are at home looking after the children, then it is still worth applying for child benefit.
When you submit the claim, you can mark a tick box and choose not to receive payments.
This will ensure you receive National Insurance credits, but won't receive or be taxed on any money.
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