You need to act now! Well, that’s the slightly scary message from HMRC anyway.
We have come across HMRC sending out letters stamped with “You need to act now!” to higher rate taxpayers receiving child benefit suggesting that additional tax may be owed.
Understandably this can cause concern. In the majority of case there is no tax to pay as the spouse of partner of the individual receiving the letter has already dealt with and correctly assessed any child benefit charges on their tax return.
To recap on the rules. Where at least one spouse / partner earns over £50,000, there is a ratcheted claw back of child benefit will full claw back where income exceeds £60,000 per annum and is dealt with under the self assessment tax return process. The claw back is generally assessed on the higher earner.
It appears that in sending out the letters, HMRC have not considered that this may have been settled on the spouse’s / partner’s tax return!