HMRC consideration a refund for high earning parents who failed to register High Income Child Benefit Charge HICBC.
HMRC has confirmed that it will review cases for tax years ended 2014, 2015 and 2016 and can offer refund to taxpayers who may have had a reasonable excuse for not declaring or registering to pay HICBC. However at the same time HMRC is writing potential taxpayers for tax years ended 2017 and 2018 about HICBC.
What is High Income Child Benefit Charge HICBC.
High income child benefit charge applies to those parents claiming child benefit but have an individual income of over £50,000. This child benefit charge is collected through a self assessment tax return or PAYE, therefore if you have to pat HICBC to must complete a tax return . This is calculated at every £1000 of income over £50,000 you loose £100 of you child benefit entitlement which means if you are between £50,000 – £60,000 income then depending on your income you may get to keep some of the entitlement. However if your income is over £60,000 then you will loose all of the child benefit received. To understand how much you may have to pay please click here
It is also important to understand what is classed as Reasonable excuse in the eyes of HMRC.
Even though all cases are treated and dealt with individually a reasonable excuse in eyes of HMRC is where a taxpayer has taken appropriate care to meet. Excuses may include but not limited to as folowing:
- Natural disaster
- Postal delay
- IT issues
- HMRC error
- Adviser error
HMRC original view for reasonable excuse was where some unforeseeable and exceptional event may have occurred but Tax tribunal does not confine at this such narrow interpretation.
What counts as income in eyes of HMRC.
To understand income crosses over the threshold you will need to work out Adjusted net income. Adjusted net income is your altogether total income is before the tax free personal allowance and minus the contributions such as gift aid. You can find out your taxable income here
If you need any further help please feel free to get in touch by clicking here with one of our expert tax advisers.