In December, HMRC issued a further reminder to the 1.2 million high-earning households that it estimates will be affected by the January 2013 child benefit changes. The high-income child benefit charge (HICBC) applies to those earning more than £50,000 a year, with a one per cent charge on the benefit paid for every £100 of income over this threshold. Households with an individual earning £60,000 or more will have the benefit withdrawn completely.
Those liable to pay the new HICBC were asked to choose whether to keep receiving benefit and pay the charge through self-assessment, or to stop receiving the benefit altogether. Households opting out of child benefit payments completely will have to tell the relevant authorities before the 7 January deadline. It’s important, however, to find out if your child benefit payments would still be above the HICBC – or you could lose out on benefits you are entitled to. If you are liable for the charge and decide to keep receiving the benefit, you will be need to fill in a tax return and register for self-assessment.
We can help work out your HICBC charge and help complete self-assessments. We can also look at ways to legitimately reduce adjusted net incomes to lessen HICBC liabilities, such as paying more into a company pension scheme, salary sacrifice or through charitable donations.