Higher Income Child Benefit Charge

posted on March 13, 2020

by: Ian Marlow / 0 comments / Personal Tax Returns

The higher income child benefit charge applies whenever a couple claiming child benefit has an adjusted net income of £50,000 or more. The charge claws back 1% of the child benefit for every £100 by which the adjusted net income exceeds £50,000 and so is lost completely at an income of £60,000. So, if either partner earns between £50,000 and £60,000 a year before tax, you have to pay a proportion of your Child Benefit back as Income Tax.

You will still get paid the full amount of Child Benefit each month (or each week, if you’re paid weekly) but you will need to fill in a Self Assessment tax return so HMRC can calculate the amount of extra higher income child benefit charge you will have to pay. And don’t forget that making pension contributions or donations to charity can have the affect of reducing the adjusted net income.

There are some issues you may need to consider:

A single person will be liable for the higher income child benefit when their income exceeds £50,000 but a couple can each have an income of £49,999 and escape the charge.
You can be liable for the charge when someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep.
It does not matter if the child living with you is not your own child.

Why Register for Child Benefit?

You can choose not to receive Child Benefit payments, but you should still fill in the Child Benefit claim form. This will help you get National Insurance credits which count towards your State Pension. So claiming Child Benefit will help you protect your State Pension, if you’re at home looking after your baby or children and not paying National Insurance, as you’ll get credits towards your State Pension. You can phone the Child Benefit Office on 0300 200 3100. And claiming Child Benefit also means your child will get their National Insurance Number automatically shortly before they’re 16 and won’t have to apply for one.