HMRC issued an alert to parents urging them to check their entitlement
Parents who have received pay increases recently have been urged to check if they are now over the threshold for the High Income Child Benefit Charge. This could mean they need to pay back HMRC, although how much they owe will depend on how much they earn.
The Department shared an alert on X, urging parents to check if they need to pay back some of the benefit and how to do so. The higher your earnings are above the threshold, the more of the benefit you will need to pay back to the Government.
If you or your partner earns more than £60,000 a year, you’ll need to pay back a relative portion of your Child Benefit payments. However, once you or your partner’s income reaches £80,000 or more, you’ll have to pay all of it back
It’s worth noting that this is for individual income, not your combined income in the household. If both you and your partner’s income is over the threshold, then whoever has the higher income is responsible for paying the charge.
If your income is over the threshold you have one of two options; you can continue your Child Benefit claim and pay the tax charge either through PAYE or a Self Assessment tax return. The method you use may depend on your other financial circumstances, such as if you are self-employed, you’ll need to use the Self Assessment method.
Or you can choose to opt out of receiving Child Benefit payments. However, this does not mean your claim is outright cancelled, as the benefit also provides other things like national insurance credits, which will continue.
These credits count towards your state pension and can be a lifeline for people who are not working or not earning enough to pay National Insurance contributions while raising children. For the full new state pension, you need around 35 years’ worth of these credits or contributions. Even if you do not need the credits, you may be able to transfer them to your partner.
The Gov.uk website has a Child Benefit tax calculator which can help people figure out how much of their Child Benefit payments they will need to pay back if their earnings are over the threshold.
Child Benefit rates:
- £27.05/week for your first child
- £17.90/week for each additional child
For families with just one eligible child, this can earn £104.20 per month. To be eligible to claim Child Benefit, you need to be raising a child who is under 16, or under 20 if they are in approved education or training.
You’ll also need to be living in the UK and the child must either be living with you, or you pay towards their care around the same amount that you would get from the benefit.
Only one person can get Child Benefit for a child, but there’s no limit to how many children you can claim for.
Putting a claim in for Child Benefit will also provide a National Insurance number for your child without them having to apply for one. They’ll usually get this number shortly before they turn 16.
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