HMRC update for parents to make things ‘easier’ | Personal Finance | Finance
Parents caught by a controversial charge have been handed a small boost after HMRC announced it is making the tax easier to pay.
The taxman said parents completing a Self Assessment tax return will now find their Child Benefit information automatically filled in online, cutting paperwork and reducing the risk of mistakes. HMRC announced the move in a social media update, saying: “We have made it easier to pay the High Income Child Benefit Charge. Customers in Self Assessment will now have their Child Benefit information pre-populated on their online tax return.”
The change is aimed at the hundreds of thousands of families who have to repay some or all of their Child Benefit because one parent earns above the income threshold.
The High Income Child Benefit Charge has long been one of the most criticised parts of the tax system, with many parents complaining it is unnecessarily complicated and catches families out.
Under current rules, the charge starts once the highest earner in a household has an adjusted net income of more than £60,000. It increases gradually until Child Benefit has to be repaid in full once income reaches £80,000.
Anyone liable for the charge normally has to complete a Self Assessment tax return unless they choose to have the charge collected through their PAYE tax code where eligible. Until now, parents have had to enter details of the Child Benefit they received manually when completing their return.
HMRC says pre-populating the figures should make the process quicker and reduce errors. The update is available through HMRC’s online Self Assessment service, with customers also able to view their Child Benefit information through the HMRC app.
The app allows users to check their tax code, National Insurance record, Self Assessment bill, Child Benefit payments, State Pension forecast and other tax information in one place. It also enables taxpayers to make Self Assessment payments, claim eligible refunds and receive digital updates from HMRC.
The High Income Child Benefit Charge has become an increasingly significant issue as wage growth has pushed more families above the income thresholds. Critics have repeatedly argued the system is overly complex because the charge is based on the income of the highest earner rather than total household income, meaning families with the same combined earnings can face very different tax bills.
HMRC hopes the latest change will at least remove some of the administrative burden by automatically inserting Child Benefit information into online tax returns, making it easier for parents to calculate and pay what they owe. More details can be found here.
