Child Benefit: Some recipients may need to file tax return this week or face £100 penalty

Self Assessment is a system which is used by HM Revenue and Customs (HMRC) to collect Income Tax. If a person needs to send a Self-Assessment Tax Return, they fill it in after the end of the tax year (April 5) it applies to.

As the deadline looms, Kay Ingram, Chartered Financial Planner and Director of Public Policy at LEBC Group, has explained that some people affected by the charge will need to file this tax return.

“If you continue to receive Child Benefit and one of the adults in the household has adjusted income of more than £50,099 you will need to pay tax on the Child Benefit,” she said.

“This applies, regardless of the marital status of the adults in the household, or their relationship to the child for whom the benefit is payable.

“Once adjusted income exceeds £60,000 it is taxed at 100 percent. Where both adults have adjusted income over £50,000 the adult with the higher income is responsible for paying the tax.

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“The tax is charged at one percent of the Child Benefit for every £100 of adjusted income over the £50,000.”

Ms Ingram went on to suggest that while filling in a Self-Assessment Tax Return may not be how a person wants to spend their time, she said some may be better off doing so – rather than waiving the payment.

“Those who are only marginally over this should resist the temptation to simply waive the Child Benefit,” the Chartered Financial Planner said.

“While this is administratively simpler, it means loss of otherwise tax-free income.

“Child Benefit is currently £20.70 per week and an additional £13.70 per week for each additional child. It will increase by 1.7 percent in April.