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Child benefit fines wiped for 6,000 parents

Child benefit fines wiped for 6,000 parents

HMRC has cancelled penalties for more than 6,000 parents and guardians who were fined for not registering for the high income benefit charge.

The department reviewed fines which were issued for the 2013/14, 2014/15 and 2015/16 tax years. After reviewing 35,000 cases where penalties had been issued, HMRC decided to wipe fines for 6,000 customers – including making 4,885 refunds worth £1.8 million. 

This is because it has decided some customers did have a reasonable excuse for not registering. HMRC defines a 'reasonable excuse' as something which stops a customer meeting a tax obligation which they've taken appropriate care to meet.

See our Child Benefit guide for more info and how to claim. 

What is the high income child benefit charge?

The charge is a cost levied on people who get child benefit but also have a relatively high income.

You may have to pay the high income child benefit charge if you have an individual income over £50,000 and either:

  • You or your partner get child benefit.

  • Someone else gets child benefit for a child living with you and they contribute at least the equivalent of the weekly amount of child benefit towards taking care of them.

If you have to pay the charge, you'll need to complete a tax return.

If your income is between £50,000 and £60,000, the charge will be less than the child benefit you receive, so you'll still be in pocket even if you have to pay the charge.

But if you earn over £60,000, you'll repay all the money. There is still a good reason to claim child benefit though, as it can help to protect your state pension and will make sure your child receives a national insurance number.

See full info on how the charge works on the Gov.uk website. You can use HMRC's child benefit tax calculator to work out if you have to pay.

I've had a high income benefit charge fine – what should I do?

Usually, if you've been issued with a fine, you'll have to prove you had a 'reasonable excuse' for why you didn't register for the high income benefit charge.

But HMRC has cancelled fines automatically for these customers, so you don't need to do anything.

Of the 6,000 taxpayers whose fines were wiped:

  • 4,885 had already paid the fines and are entitled to a refund. £1.8 million has been paid back, meaning the average refund was around £370 per customer. HMRC says these refunds have all already been paid, and that entitled customers were sent payable orders by post.

  • The remaining customers hadn't yet paid and will have the fines cancelled. HMRC says these customers have been contacted by letter to tell them they don't need to pay the fine.

What else is HMRC doing about the issue?

HMRC says it's improving child benefit forms, guidance and communications. It says it will tell people their options for paying the charge, as well as how to claim child benefit without receiving payments.

We've also full help in our Child Benefit guide.