THOUSANDS of parents have been warned they could face demands to return benefits to their children – and potentially huge fines if they don’t.
Mothers or fathers earning over £50,000 must pay the High Income Child Benefit (HCBC) if they receive this benefit.
Children’s rights worth £84.60 a month for the first child – or just over £1,000 a year – and £56 a month for an additional child.
Anyone affected by the high income must file a tax return, and the deadline for this is fast approaching January 31.
About 1.6 million will be affected by taxes and fees this year – about one-fifth of the family,
Before the pandemic hit, HMRC contacted more than 120,000 families for non-compliance, according to data from NFU Mutual.
HCBC means that if the parent earns more than £50,000 they must pay tax on the allowance.
Taxes are paid at the rate of 1% of benefits for every £100 earned on this amount.
If either parent earns £60,000 or more, the full amount must be refunded.
But many parents are unaware of the fee that dates back to 2013.
The sun has previously spoke to parents affected by unexpected bills thousands of pounds.
If you do not file your self-assessment tax return, you may be fined by HMRC up to 30% of the amount you owe
The number of people being chased by HMRC has decreased because of the pandemic – but tax officers are still checking, which could lead to requests by parents to hit the doormat.
Sean McCann, chartered financial planner at NFU Mutual, said: “HMRC has dramatically increased the number of checks it did before the pandemic when more than 120,000 families were contacted in a single tax year, But when staff were redeployed to deal with Covid’s plans, that number collapsed.
“Families who did not receive a reminder letter last year should not assume they do not owe taxes.
“If you have income over £50,000 and receive child support or live with your partner, you may need to pay it back.
He added that with the self-imposed filing deadline approaching the end of January, it’s a good idea to check now if you need to pay a tax fee.
You need to file your self-assessment tax return by January 31, and do so for each year in which you are affected.
Some parents continue to claim benefits for their children and pay fees for it help them build national insurance credits, which you need to qualify for a state pension.
If you don’t tell HMRC and don’t pay your taxes, they can fine you – on the amount you owe.
The value of the fine can be up to 30% of the amount, unless you have “good cause”.
HMRC does not state a reasonable or statutory reason but you must have a good reason for not meeting your tax liability and you will need to demonstrate this.
More than 1,000 penalties were issued in the 2029/20 tax year and nearly 5,000 the year before.
If you were penalized and think you shouldn’t be, you can appeal.
“Even though the penalty for not notifying HMRC has been reduced, tax officers are still likely to chase you if you ignore their reminders,” says McCann.
Payment procedures Our guide to your tax return.
You can use the government child benefit tax calculator to see how you might be affected.
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