Higher Income Child Benefit Charge
As of today, changes to child benefit have been introduced that will mean that over one million families will lose some or all of their child benefit.
Those people with an individual income of over £50,000 lose part of their benefit, and it will be fully removed if they are earning over £60,000.
One thing to note is that this is for the parent’s individual income, i.e. where one parent in the household is earning above the threshold. This means that if both parents are earning £49,000, they will receive the entire amount of benefit (currently £20.30 for the first child, and £13.40 for any others), despite having a total household income of £98,000, whereas if one parent is earning £60,000, they will receive no benefit.
Those who come under the new rules should have received a letter from HMRC informing them of what action, if any, needs to be taken. The two options available were:
- Stop receiving CB and avoid the charge (opting out) or
- Keep getting CB and declare the payments for income tax purposes
Those who have not already opted-out, or are choosing the latter option will have to submit a self-assessment tax return. If you think this applies to you, and that you need to take action, then get in contact and we can advise you.