Source: HM Revenue & Customs | 09/05/18
The High Income Child Benefit charge came into force in January 2013 and applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of child benefit. The charge claws back the financial benefit of receiving child benefit either by reducing or removing the benefit entirely.
If you or your partner have exceeded the £50,000 threshold during the last tax year (2017-18) then you must take action. Where both partners have an income that exceeds £50,000, the charge applies to the partner with the highest income.
Taxpayers who continue to receive child benefit (and earn over the relevant limits) must pay any tax owed for 2017-18 on or before 31 January 2019. If the relevant partner is not currently registered for self assessment they must do so by 5 October 2018.
The child benefit charge is charged at the rate of 1% of the full child benefit award for each £100 of income between £50,000 and £60,000. For taxpayers with income above £60,000, the amount of the charge will equal the amount of child benefit received.
HMRC’s guidance on Child Benefit stresses that if the High Income Child Benefit charge applies to you or your partner it is still worthwhile claiming Child Benefit as it can help to protect your State Pension and will make sure your child receives a National Insurance number.
However, taxpayers still have the choice of whether to keep receiving child benefit and pay the tax charge through self assessment or elect to stop receiving child benefit and not pay the charge.
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Below are links to websites you may find of interest, but as we like to support our local community and clients, we have included links to websites that may be of interest:
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