HMRC refunds £1.8 million child benefit tax penalties

HM Revenue and Customs (HMRC) has issued £1.8 million in refunds after reviewing cases where families were hit with penalties for failing to register for a charge relating to their child benefits.

Thousands of penalties have been cancelled as a result of revoking ‘failure to notify’ penalties in high-income child benefit charge (HICBC) cases; on the grounds that they had a reasonable excuse.

The HICBC, which was introduced in 2013, receives money back from higher-income households receiving child benefits. This charge applies to people who have an individual income over £50,000 and either they or their partner receives child benefit.

Those affected by the tax charge can choose not to receive child benefit payments, but by filling in the child benefit claim form means families can still receive national insurance credits which will count towards their state pensions.

People who are affected can also opt to carry on getting child benefit, however, this means paying charges at the end of each tax year.

After a review, HMRC cancelled the penalties of over 6,000 customers who had a reasonable excuse for not notifying the Government about their liability for the tax years 2013 to 2014, 2014 to 2015 and 2015 to 2016, with parents receiving an average refund of £370.

All those entitled to a refund will now have received one and do not need to contact HMRC.