HM Revenue and Customs has issued an urgent alert to parents across the UK, warning that thousands could face penalties of up to £1,000 for failing to comply with Child Benefit rules. The tax authority is specifically targeting households where one parent earns over £60,000 annually.
What Parents Need to Know Immediately
The High Income Child Benefit Charge affects families where the highest earner's income exceeds £60,000. For those earning between £60,000 and £80,000, the benefit is gradually reduced through a tapered system. Once income reaches £80,000, the entire Child Benefit amount must be repaid.
Many parents are unaware that they must register for self-assessment and declare this income, even if they don't normally complete tax returns. The deadline for the 2023-24 tax year is October 5, 2024, with payments due by January 31, 2025.
The Hidden Consequences of Opting Out
Experts are particularly concerned about parents who choose to stop receiving Child Benefit altogether to avoid the charge. This decision creates a significant gap in their National Insurance record, potentially affecting their state pension entitlement.
Myrtle Lloyd, HMRC's Director General for Customer Services, emphasised: "We want to remind people about the High Income Child Benefit Charge and urge them to register for self-assessment. It's crucial that people complete their tax return by the deadline to avoid penalties."
Critical Steps to Protect Your Finances
- Register for self-assessment immediately if your income exceeds £60,000 and you receive Child Benefit
- Complete your tax return by October 5, 2024 for the 2023-24 tax year
- Continue claiming Child Benefit to maintain your National Insurance record, even if you must repay it
- Set aside funds to cover the High Income Child Benefit Charge repayment
- Seek professional tax advice if uncertain about your obligations
Failure to comply could result in initial penalties of £100, with additional charges accumulating over time. In severe cases, fines can reach £1,000 or more alongside the original tax owed.
The warning comes as HMRC intensifies its efforts to recover unpaid taxes, with the High Income Child Benefit Charge representing a significant area of non-compliance among otherwise law-abiding taxpayers.
