Deadline approaches for child benefit returns
24th Jan 2015
Tax payers who received child benefit in the last tax year and earn more than £50,000 are reminded that they must submit a tax return by the end of January.
In the first year that the government will reclaim 100 per cent of child benefit from anyone earning over the £50,000 threshold, some financial advisors are concerned that people expected to submit a return are unaware that they are supposed to, or do not understand the consequences of not handing in a tax return.
Should the 31 January deadline be missed, there will be an automatic £100 fine, and tax paid after the deadline will also incur interest. After 2 March, any outstanding tax will be given a 5 per cent surcharge.
Partner and head of the private wealth group at Saffery Champness, James Hender, has stated that this year, ‘more people than ever’ are having to file tax returns related to the government trying to get back child benefit. Recently, HMRC has been ‘sending speculative letters to higher earners’, asking them to declare that they are not due to repay any child benefit they have received, which Hender believes indicates that the government is taking the matter seriously. The outcome is that anyone suspected of not complying with most likely be chased.
Lucy Brennan, also a partner at the Saffery Champness private client team, highlighted that practical considerations should be taken into account, and that registration for the platform used to submit the tax returns can take more than a week. HMRC has been clear that it will not consider postal delay a valid excuse for late returns, and will uphold penalties for late returns in such circumstances.
Hender’s final note was that HMRC computer servers ‘have a nasty habit of crashing under the weight of last-minute filers’, so recommends submitting early to avoid ‘unexpected tax liabilities’.