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The ICAEW Tax Faculty has published guidance covering the high-income child benefit charge (HICBC), which came into force earlier this month.
The document by David Kirk, which is available only to Tax Faculty members, includes advice for advisers having difficulties with obtaining accurate information about a client’s former partner’s income for the purposes of the HICBC.
In such cases, “it will be necessary to take a view” but in any event the return should be submitted by the appropriate filing date, writes Kirk.
His guidance continues, “Where the client feels it is likely he will have to pay the charge and that he will be able to find out later whether or not this assumption was correct, fill in the return on the basis the charge is payable, and amend the return later if need be.
“Otherwise, file the return on the basis that no charge is payable but enter some wording in the white space in box 19, such as: ‘Mr Xxx has signed this return on the basis that no HICBC is payable. Attempts to find out whether his adjusted net income was higher than his ex-wife’s for the year in question were made as follows: by written request to her on [date]; and by online requests to HMRC on [dates]; these attempts have regrettably been unsuccessful’.”
The Tax Faculty document goes on to advise that when dealing with clients who are not within self assessment and do not know by 5 October whether or not they will be liable for HICBC, “a view should be taken as to whether a charge is likely. If it is, form SA1 should be signed and sent off to HMRC in time.
"Where this is not done in time, an explanation as to why not should be sent off with the form when it is completed.”
