According to press reports HMRC says that some 165,000 higher earners who are in receipt of Child Benefit did not register for Self Assessment (SA) by 5 October and so may get "a penalty". We wonder what sort of penalty that could be.

The mystery is not helped by HMRC which says this on its website:

“You need to register as soon as possible and no later than 5 October 2013 for the 2012-13 tax return. If you register late you may have to pay a penalty…”

According to the BBC website in September:

"Paul Lewis from Radio 4's Money Box told BBC Breakfast that high-earners would have to contact the tax office by early October or face a possible fine of hundreds of pounds..."

According to the BBC on Monday, a spokesman for the tax authority said:

"On past experience we expect more people to register in the coming days. Although we are past the deadline, people should still register for self-assessment to minimise any penalties they may face."

The Telegraph's article today says

"Around 165,000 parents face a fine from HM Revenue & Customs after failing to register for self-assessment after claiming child benefit...."

and the Daily Mail site today says

"If they miss the Saturday deadline, they could be given a fine equal to what they owe..."

Penalties and the HICBC

There is no provision for special HICBC penalties in Part 8 Chapter 10 ITEPA 2003 which covers the HICBC so you won't get a penalty if did not sign up for Self Assessment by 5 Oct.

The only penalties that could apply to higher earners in connection with the HICBC are the standard penalties which apply for all taxpayers under SA, these are:

  • Failure to file a SA return on time
  • Failure to pay tax under SA on time
  • Making an error or mistake in a return or document

So, if a higher earner is liable to the Higher Income Child Benefit tax charge for 2012/13, and assuming that they have not already elected to stop receiving child benefit they will only get a penalty if they fail to file their SA return and pay their tax by 31 January 2013, or they file and pay on time, but make an error due to careless behaviour (or fraud) and so understate their tax liability.

Failing to register for SA by 5 October does not in its own right lead to a tax penalty.

What to do if you have not registered for SA?

Phone HMRC or register online. You need to obtain a Unique Tax Reference number in order to file your return. If you cannot file online, you will need to contact HMRC to ask about the options available to you.

Useful reading:

How to work out the HICBC

HICBC tax and planning  (subscription content)

Penalties under Self Assement (& Compliance)