Some families have not been notified of child benefit changes relevant to them. From 7th January child benefit became means tested and families where at least one partner earns £50,000 per year are now entitled to less benefit, while families where at least one partner earns £60,000 per year are no longer entitled to any child benefit. Approximately 1.1 million families have been affected, 70% of who have last all of their child benefit. The average loss will be roughly £1,300.
HMRC have failed to let many families know about these changes. It is thought that up to a third of families whose child benefit will be affected have not been informed , despite the tax office vowing that they would write to them in autumn 2012.
A spokesman for HMRC has blamed the lack of communication on HMRC holding incomplete data on some customers following changes to their income, relationship status or address, “There may be cases where people’s circumstances have changed, for example their income may have increased or address may have changed, and we will not yet have up-to-date information. However, to ensure people know about the changes we are also using extensive advertising, media and online activity, as well as written communication.”
Now that the new rules have come into force, unless they opt out of receiving payments, a family with at least one high earner will continue to be paid child benefit, worth £20.30 a week for the oldest child and £13.40 a week for each subsequent child, but will have some or all of the money taken back as a tax charge through the self-assessment regime.
Families who stand to lose the whole benefit can opt to cancel payments rather than receiving them and then repaying them as tax. It has to be the recipient of child benefit who cancels the payments though; whether they are the high earner or not. This is the case even though where letters have been sent out they have been sent to the high earner and it will be they who must pay the tax charges regardless of who receives the benefit.