It was announced by the government in its last budget that it intends to recover some of the child benefit it has been giving to lower income families. The entire child benefit will be recovered in cases where one of the partners earns more than £60000 per annum.
The new proposal, called High Income Child Benefit Charge (HICBC), came into effect from January this year. Those families that come under the net must declare their liability on a prescribed form. Letters from HMRC have been dispatched to the households that need to return the child benefits that they have so far received. There are around 500,000 taxpayers who will be filing their returns for the first time in the financial year 2012-13. According to tax analysts, the provisions of the HICBC are not that simple.
Not surprisingly, around 400000 families have already opted out of HICBC knowing well they will be asked to return the benefits they are taking. Those who applied to be excluded from HICBC before January 7 are the people who are not required to anything now but if you are a part of a household that has continued to receive child benefits even after January and your annual income is more than £50000, you will need to register yourself and start paying back some of the benefits that you have availed so far.
Although it is necessary to get yourself registered before 14 October, it is not until January 2014 that you will be asked to make payment to return child benefits. If you are one of those who still file tax returns on paper, you have to do it by October 31. On the other hand, if you file tax returns online, you get an extension till 31 January to file your tax returns.