It looks like HMRC are at it again !
We are aware that a number of letters have been received by tax payers in relation to High Income Child Benefit Charge. If you are not aware, this was the coalitions policy of reducing or removing child benefit for those families where one of the parents earn over £50k per year. The charge starts at £50k and removes 1% the child benefit payable for each £100 of additional income and so removes 100% at an income of £60k.
Although our clients have not been affected, we have learned that strongly worded letters suggesting tha tax payers need to “Act Now” have been sent to those who’s income is actually below £50k or to those where the HICBC has actually been applied to the husbands or wife’s tax return.
The letters appear to be poorly written and poorly targeted. The effect has been panic.
It appears to be the case that HMRC have compared Child Benefit records to a taxpayers return but not considered the possibility that the income could be lower or the charge paid elsewhere.
In the examples that we have seen the tax agent has got the returns spot on!
If you have had a letter off this nature and need some help in tax planning or tax returns the please call us today.