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Families alerted to child benefit changes

12 October 2012
Issue: 4375 / Categories: News , Income Tax
Complexity worries as HMRC issues letter

With the new high income child benefit charge set to come in to force in January, recipient families that include someone who earns more than £50,000 will soon receive a written outline of changes.

The letter from HMRC asks about how much “individual income” a recipient or their partner may earn, including salary, dividends, income from rental properties including holiday homes, self-employed earnings, interest on savings and pensions. Gift aid payments should be deducted when determining the final figure.

For couples who will not or cannot discuss their respective incomes with each other, the Revenue will try to provide the minimum amount of information necessary for someone to establish whether they or their partner has the higher income.

Contract work and possible forthcoming projects should also be considered in case they take either partner further over the £50,000 threshold.

All taxpayers affected by the charge will need to declare their liability through self assessment. HMRC estimate there are up to 500,000 taxpayers who do not currently complete a self assessment return will be liable and have to complete a tax return for 2012/13.

Anita Monteith, manager from the ICAEW Tax Faculty, said, "The charge will increase complexity and compliance costs, and we are worried we are going to see the same operational problems arising that we saw for tax credits – especially for those with fluctuating incomes."

 

Issue: 4375 / Categories: News , Income Tax
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