Did you know that changes to the Higher Income Child Benefit Charge (HICBC) could mean more money for your family?
So what has changed in relation to Child Benefit?
As of 6 April, the income cap has increased from £50,000 to £60,000, and families with one taxpayer earning up to £80,000 per year can still benefit from child benefit payments, whereby previously if one member of the household earned more than £50,000 the Higher Income Child Benefit Charge would start to kick in.
What is the Higher Income Child Benefit Charge (HICBC)?
The HICBC is a tax charge that applies when a parent or their partner earns over £60,000 and claims Child Benefit.
It effectively claws back some or all of the Child Benefit through the tax system.
How does the HICBC taper work?
The charge is tapered, meaning it gradually increases as income rises. For every £200 of income over £60,000, a 1% charge applies to the Child Benefit amount.
This means that once income exceeds £80,000, the charge equals the entire Child Benefit payment.
Why should you claim Child Benefit even with a high income?
Claiming Child Benefit can be advantageous for families with income between £60,000 and £80,000, as they may still be entitled to some Child Benefit.
Additionally, it can help build National Insurance credits, qualifying you for the State Pension.
What should you do if you’re now eligible?
If your income has decreased and/or due to these new thresholds you’re now eligible for some or all of the Child Benefit, you should proactively register from 6 April 2024.
Don’t delay, as claims can only be backdated for three months, and the deadline to opt back in is 5 July 2024.
Key Dates:
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6 April 2024: Higher Income Child Benefit Charge changes take effect
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5 July 2024: Deadline to opt back into Child Benefit
If you have any questions relating to the Higher Income Child Benefit Charge, please don’t hesitate to contact the Tax Team at IN Accountancy who will be happy to help!
For further information please visit:
GOV.UK: High Income Child Benefit Charge – Official government guidance on HICBC, including how to calculate and pay the charge
HM Revenue and Customs: Child Benefit tax calculator – An official calculator to help determine if you need to pay the HICBC and estimate the amount
GOV.UK: Child Benefit – The official page providing general information about Child Benefit, including eligibility and how to claim
