Claiming Child Benefit
The High Income Child Benefit charge came into force on 7 January 2013 and applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of Child Benefit. The charge either reduces or removes the financial benefit of receiving Child Benefit. Where both partners have an income that exceeds £50,000, the charge will apply to the partner with the highest income.
The Child Benefit charge is 1% of the full Child Benefit award for each £100 of income between £50,000 and £60,000. For taxpayers with income above £60,000, the amount of the charge will equal the amount of Child Benefit received. Taxpayers affected by the change can continue receiving Child Benefit and pay the tax charge through Self Assessment, or elect to stop receiving Child Benefit and not pay the new charge.
Taxpayers that remain entitled to the Child Benefit should be aware that HMRC usually stop paying Child Benefit on the 31 August following a child’s 16th Birthday. Under qualifying circumstances, the Child Benefit can continue until a child reaches their 20th birthday. The Government recently increased the age to which all young people in England must continue in education or training, requiring them to continue until the end of the academic year in which they turn 17 from 2013 and until their 18th birthday from 2015.
The rules are different in Wales, Northern Ireland and Scotland. Any parents with children that remain in approved education or training should contact the Child Benefit office to ensure they continue receiving the Child Benefit payments to which they are entitled.