PARENTS have just days left to alert HMRC if they owe a tax charge on child benefit.
If they don't they could be stung with penalties adding up to hundreds of pounds.
Fines for late payment of tax will start from April 1 and for some that could be as much as 30% of the money owed.
Child benefit is worth £84.60 a month for the first child – or just over £1,000 a year – and £56 a month for an extra child.
But if either parent is earning over £50,000 they have to pay the high income child benefit tax charge.
This means you pay back 1% of your child benefit for every £100 of income over this amount.
Read more on benefits
All the benefits for new parents rising in WEEKS – will you get more?
All the disability benefits going up in April including PIP – will you get more?
Once you reach £60,000 of income you have to repay the full amount.
To do this they need to file a tax return and the deadline for this has already passed on February 28 (extended from the usual 31 January due to Covid).
Anyone who hasn't already filed will likely get a £100 flat late payment fine – unless they have a good reason for not completing it on time.
And the penalty will escalate from next month when the charge can be a percentage of the bill plus interest on top.
Most read in Money
We’re giving away our four-bed home, Range Rover and superbike for just £2
Tesco DOUBLES the price of sanitary product – new cheapest place to buy revealed
McDonald's is bringing back popular menu item TODAY and there's a new flavour
I'm a car boot sale expert and here are 9 tips to make cash from your old junk
The penalty gets higher again if the bill is left unpaid going up in August and the February 2023.
For a family with two children child benefit would be worth £1,827.80 a year.
But if one parent earned over £60,000 then they would have to pay it all back.
If they didn't a penalty of over £500 could be added to the outstanding bill in the worst case.
But the exact amount you could be fined will depend on how many children you have and how much you child benefit you have to pay back.
Anyone affected should contact HMRC before April 1 to avoid the penalties and arrange paying the charge.
You can pay what you owe in a lump sum or work out a payment plan.
Child benefit high income tax charge – are you affected?
Around 1.6million are set to be affected by the tax charge this year – around one in five families,
But many parents are not aware of the charge which came in from 2013.
The Sun has previously spoken to parents who were hit with surprise bills of thousands of pounds.
One parent, Jason Wilkes, has challenged the rules in court after being asked to repay £4,000.
It's up to parents to notify HMRC if they are liable for the charge and they must file a self-assessment tax return to pay it.
The amounts for the charge have not changed in nearly a decade, but over that time wages have risen so more families fall into the tax trap.
Although the charge is designed for those on high incomes, thousands of those now affected are basic rate taxpayers.
The higher rate of tax (40%) applies to earnings over £50,271. Around 120,000 families earning less than this but over £50,000 have to repay some of the benefit.
The rule applies when just one parent earning over this amount and if for example both earn £49,900 each, they won't be affected.
Charity Turn2Us recommends using the government's child benefit tax calculator to see how you might be affected by the high income tax charge.
You should check for previous years if you earned over this amount as you could owe the tax for previous years.
You should contact HMRC if that's the case.
You can decide to opt out of getting the benefit altogether to avoid having to pay money back. But you risk missing out on National Insurance credits.
These fill gaps in NI contributions when not working, and count towards how much state pension you get in retirement.
Read More on The Sun
Denise Van Outen reveals revenge porn hell after man filmed her losing virginity
Putin’s troops brand maternity ward airstrike ‘most perverse neo-Nazism’
One grandmother has lost out on £800 a year in state pension payments after missing out on the credits.
The credits can be passed on to family who are looking after kids – but only if the parent is claiming the credits through child benefit in the first place.
We pay for your stories!
Do you have a story for The Sun Online Money team?
Email us at [email protected]
Source: Read Full Article