HMRC has generated significant publicity around the High Income Child Benefit Charge, including the need for an estimated 200,000 parents to be registered with HMRC for self assessment by 5 October. This affects parents who are not already registered with HMRC, who receive child benefit and are in a household where a member of the household earns an income in excess of £50,000. Where the earnings in question are in excess of £60,000 it is not advisable to claim child benefit.
Parents who didn’t take action should do so now.
ACCA’s Technical Factsheet 178 provides detailed guidance on High Income Child Benefit Charge that includes example calculations such as:
Vicky and Andy are married, with three sons.
Vicky receives child benefit for Ashley (£20.30), Daniel and Josh (£13.40 each).
From 7 January to April, she receives (20.30 x 13) = £263.9 + (£13.4x2x13) = £348.4: rounded down to £263 + £348 total £611.
Andy earns £55,000 and Vicky earns £5,000.
Percentage charge: £55,000 – £50,000 = 50%
Andy is liable to a charge of 50% x £611 (after rounding down).
The charge would be £305.
Parents who wish to stop claiming benefits can do so via HMRC’s website.
Article contributed by ACCA