If you are a high earner and have children you will be well aware of the changes to child benefit which came into effect on 7th January 2013. In this instance a “high earner” is someone with income of £50,000 or more, which is probably what most would not think of as a “high earner”. HMRC believe that a large number of families are affected by the rule changes and should now have registered for self-assessment as a result. Failure to do so may result in a penalty – given the hunger of HMRC to collect as much as possible, this is likely and will come as a further penalty to those that are already losing the child benefit.
It will be difficult to plead that you didn’t know when over 2million higher rate taxpayers were written to about this topic by HMRC. Pleading the case for children to authoritarians often doesn’t wash, as the wonderful Charlie Chaplin discovered in “The Kid”. The official figures suggest that around 400,000 people have ended up opting out of receiving child benefit, which is currently £20.30 per week for the eldest child and £13.40 for each subsequent child. So in theory those that opted out have saved the State a minimum of £1,055.60 a year each, which is £422m. The last HMRC estimate suggested that they believed 600,000 would be affected.
Dominic Thomas: Solomons IFA