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Business Matters

Child Benefit Tax - too late to be legal?

The tax rules as simply as possible:

If you OR your partner have annual taxable income of more than £50,000 AND one of you is receiving Child Benefit you must submit a Self Assessment Tax Return and whoever is the person receiving the income of more than £50,000 will pay tax on the Child Benefit received. For 2012-13 tax year the Child benefit Tax only applies from 7th January 2013.

While there is STILL time to register for Self Assessment and submit a tax return, you should be aware that the time is running out and probably by 1st December it really will be too late given how long it takes HMRC to do anything and as you would be registering late, it will be difficult to appeal against a penalty for late submission of a Self Assessment Tax Return.

One small point, we're talking about taxable income which is after taking account of pension contributions and a few other adjustments to earnings. It's too late to do any planning now for last year but something you may wish to think about rather than be caught in the trap this year. So if you need any help call us for some guidance.

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