Will you need to pay-back Child Benefits?
06/01/2022

The High Income Child Benefit charge 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 for the first time during the last tax year (2020-21) then you must act. 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 2020-21 on or before 31 January 2022. 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.

If the High Income Child Benefit charge applies to you or your partner it is usually worthwhile to claim Child Benefit for your child, as it can help to protect your State Pension and will make sure your child receives a National Insurance number. However, you still have the choice:

  • to keep receiving child benefit and pay the tax charge or
  • elect to stop receiving child benefit and not pay the charge.

CONTACT US

Fraser Ross House
Fraser Ross House, 24 Broad Street, Stamford, Lincolnshire, PE9 1PJ
Contact Us: info@brayshaw-morey.co.uk
Call Us 01780 750840

SEE LOCATION ON MAP

xero transparentfreeagent trans  CPAA