Will you need to pay-back Child Benefits?

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

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.
Source: HM Revenue & Customs Tue, 04 Jan 2022 00:00:00 +0100

Latest INSIGHTS

Check out our latest Insights for useful accounting tips and information.

Company reconstructions – liabilities restriction

The rules for the Corporation Tax treatment of carried forward losses changed from 1 April 2017. The changes increased flexibility to set off carried forward losses against total profits of the same company or another company in a group whilst at the

Read More

HMRC “sweetheart” deals

HMRC has issued an interesting press release stating that ‘Fact: HMRC does not do ‘sweetheart deals’. HMRC makes sure every taxpayer, no matter what their size, pays everything they owe.’

This denial could be in response to many claims that have

Read More

Global minimum Corporation Tax of 15%

A new consultation has been published by the UK government seeking views for how a worldwide 15% minimum Corporation Tax should be enforced domestically. This follows more than 130 countries signing up to a new global minimum tax framework in October

Read More

Our phone lines ARE currently out of action

Please contact us by email

hello@emmapicklesaccountants.co.uk