HMRC Taxes Parents Of Adults As If They Are Receiving Child Benefits

As per a news report by The Guardian, if you have adult children, check to see if you are due a refund when you file your taxes by this week.

HMRC is taxing one Guardian reader as if his household is still receiving child benefit, despite the fact that his two children are now 22 and 19, and the family ceased receiving the income about 18 months ago. His case relates to one reported in Guardian Money a year ago, in which a woman in her 20s earned a £4,300 tax rebate after HMRC incorrectly continued to withhold child benefit for several years.

4 Million People Not Yet Submitted Tax Return

HMRC reported earlier this week that 4 million people had still not submitted their 2020-21 self-assessment tax returns or paid any tax owed by the deadline, which is still Monday 31 January.

However, it was recently revealed that people who file late would not be fined if they submit their return by February 28.
Child benefit is expected to be paid at £21.15 per week for the only child, then £14 per week for each additional child, totaling £1,828 per year for a household of two.

You usually qualify if you have a kid under the age of 16 – or under the age of 20 if they are enrolled in approved full-time education or training, such as A-levels.

Many families have been forced to engage in self-assessment because at least one parent earns more than £50,000. The award is clawed back on a sliding basis under the government’s high-income child benefit payment.

On a sliding scale between £50,000 and £60,000, the high-income tax charge is 1% of the amount of child benefit for each £100 of income. The charge is 100% for individuals earning more than £60,000, thus depriving them of child benefits.

The reader completed his tax return a few days ago and was surprised to learn that he owes £815 in back taxes for 2020-21. He is a father of two children who have been impacted by the tax charge for several years. His younger child, however, lost eligibility for the benefit in September 2020, right after leaving the sixth form.

Even when he became “free of the tax charge” a few months into the 2020-21 tax year, HMRC continued to make deductions for child benefits.