Child Benefit Changes – what you need to know

Child Benefit changes – what you need to know.

If you or your partner earns in excess of £50,000 this year, you will lose 1% of the Child Benefit you currently receive for every £100 of income above this limit.  Once income reaches £60,000, this benefit is withdrawn completely.

You can continue to receive the Child Benefits payments in the normal manner and pay a High Income Child Benefit Charge at the end of the tax year.

This charge will be collected via the self assessment system operated by HMRC and you should disclose receipt of the Child Benefit on your tax return next year if this charge applies to you.  If you do not usually complete tax returns, you will need to register with HMRC for self assessment by 6 October 2013 and complete a tax return online by 31 January 2014 to pay this charge.

There was the option to stop the Child Benefit payments from 7 January 2013.   The date has now passed for choosing this option.

If you applied to stop the payments this year and your income reduces next year to below the limit, then an application can be made to restart the payments. Again, this application can be made online or by telephone.

Providing that you registered for the benefit at the time your child was born, any stay at home parents will continue to receive the National Insurance credits for State Pension purposes even if you cease to receive the benefits.

It is vital that you register any further children that you have for this benefit even if you are not entitled to the income to ensure that they receive a national insurance number at age 16.

It is possible for you to preserve this allowance by reducing your income below the limit in a tax efficient manner.

Let’s start a conversation 

    Subscribe me for updates and news from In Accountancy

    Related articles

    time to pay arrangement
    Limited Companies

    Time to Pay Arrangements: A Lifeline for Owner-Managed Businesses

    Are You Struggling to Meet Your Tax Obligations?

    More than 30,000 UK businesses were involved in some kind of insolvency action in 2023, which was an increase of more than 50% compared with 2021 according to an article in the Guardian earlier this year.

    And the economic outlook would suggest that despite the fact that we are no longer in recession, 2024 and 2025 will be a challenging year for UK small business.

    With this in mind we have prepared the following guide and associated video to help you understand what your options are with regards to agreeing what is known as a ‘Time to Pay’ arrangement with HMRC.

    Read More »

    Find out how we can help?

    Lectus scelerisque a donec tincidunt litora per eleifend eget ut sagittis conubia pharetra scelerisque dui ultricies duis parturient auctor adipiscing.


    Let’s start a conversation 

      Subscribe me for updates and news from In Accountancy