02 January 2023 , 14:04
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Thousands of parents who claim Child Benefit have just under one month left to avoid being hit by a tax fine.
If you, or your partner, earn over £50,000 a year, then you must declare this to HMRC by filling in a self-assessment tax return.
The deadline for doing this online is January 31, 2023. You'll then need to pay back any Child Benefit you owe.
If you don't file a tax return, you could be fined up to 30% of the money you owe, plus interest, unless you have a reasonable excuse.
Child Benefit is a monthly payment available to parents or anyone in charge or looking after a child.
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It is worth £21.80 a week for the first child and £14.45 a week for any additional child.
Child Benefit is available to most parents (Getty Images)You receive the full amount of Child Benefit if you’re earning under £50,000 - earn above this amount, and you’ll have to pay some of this benefit back.
This is known as the “High Income Child Benefit Tax Charge” and is paid at a rate of 1% of every £100 earned over this amount.
Once you hit £60,000 a year, you need to pay back 100% of your Child Benefit.
The £50,000 threshold applies only per person - so if you’re earning more combined as a couple, you might not be eligible to pay the tax charge.
Couples can have a combined income of up to £100,000 and not be affected, as long as neither of them has an individual income of over £50,000.
You can use this Child Benefit tax calculator or call HMRC on 0300 200 3100 if you’re unsure if you need to pay the charge.
How to pay High Income Child Benefit Charge
You need to register for a self-assessment online account to pay the High Income Child Benefit Charge.
The deadline for doing this was technically October 5, 2022 - but you should still be able to register now as long as you file before January 31, 2023.
You can do this online on the Gov.uk website. Once you're registered, you then have to send in a tax return so HMRC knows how much you should be charged.
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You need to do this every year you’re claiming Child Benefit and earning above £50,000.
If you're in a couple and you both earn over £50,000, the person with the highest income must complete the self- assessment.
If you don't want to pay the charge, you can opt out of Child Benefit payments altogether by contacting HMRC.
However, claiming Child Benefit can help boost your state pension in later life if you’re not working.
Someone who receives Child Benefit for children under the age of 12 is also treated as if they had paid National Insurance contributions.
You need a certain amount of NI credits to claim the state pension in later life, so it's important not to miss out on these.
You need at least 10 years’ worth of NI contributions to get any state pension, and 35 years to get the full new state pension.