insideKENT Magazine Issue 33 - December 2014 | Page 164

LAW

TAXING
TIMES
Roger Holman, Cripps’ tax expert,
is in the hot seat this month
answering some questions he has
received regarding paying tax on
child benefit and the dreaded
tax return.
Roger Holman

I have had a letter from HM Revenue & Customs (HMRC) telling me I
need to pay the High Income Child Benefit Charge. What do I do?

I now know I need to file a return, but are there any excuses if I file
it late?

Many taxpayers have received similar letters over the past year. The first
thing I would recommend is to check what year it relates to. If it relates to
the 2012/13 tax year, you will then need to check if you completed a tax
return for that year and if it included the charge.

,
If you have a reasonable excuse, you can escape the £100 late filing penalty
but it has to be a bit more than 'my dog ate my homework'. Some examples
of failed excuses are (according to HMRC’s website last year):
1. 'My pet goldfish died' (self-employed builder);
2. 'I had a run-in with a cow' (Midlands farmer);
3. 'After seeing a volcanic eruption on the news, I couldn’t concentrate
on anything else' (London woman);
4. 'My wife won’t give me my mail' (self-employed trader);
5. 'My husband told me the deadline was 31st March, and I believed
him' (Leicester hairdresser);
6. 'I’ve been far too busy touring the country with my one-man play'
(Coventry writer);
7. 'My bad back means I can’t go upstairs. That’s where my tax return
is' (a working taxi driver);
8. 'I’ve been cruising around the world in my yacht, and only picking
up post when I’m on dry land' (South East man);
9. 'Our business doesn’t really do anything' (financial services firm); and
10. 'I’ve been too busy submitting my clients’ tax returns' (London
accountant).

There have been many cases where HMRC has mistakenly sent letters out
to people who correctly completed their tax returns. In these cases, the
letters can simply be ignored. On the other hand, if you did not complete
a return or did not include the charge on the return, you should submit a
tax return (or a revised return) for the relevant period including the charge.
How do I work out the charge?
The first thing you will need to know is how much child benefit you (or your
partner) received. Once you know this figure, you then need to work out
how much income you received in the year. If it's more than £50,000, for
every £100 over £50,000, you will be charged 1% of the child benefit you
received. If you earned over £60,000, this means that you will have to repay
the full child benefit.
What about