Thousands of parents across the UK could be hit with surprise tax bills this year due to changes in child benefit rules, experts warn.
What's Changing?
HM Revenue and Customs (HMRC) has lowered the threshold for the High Income Child Benefit Charge from £60,000 to £50,000. This means any parent earning over £50,000 will now need to repay some or all of their child benefit through their tax return.
Who Could Be Affected?
- Parents earning between £50,000-£60,000 (partial repayment required)
- Parents earning over £60,000 (must repay entire benefit)
- Approximately 180,000 additional families now caught by the rules
Why This Matters Now
The changes apply from April 2024 but many parents may not realise they need to complete a tax return until it's too late. Failure to declare could result in penalties from HMRC.
How to Protect Yourself
- Check if your income exceeds £50,000 (including bonuses and benefits)
- Register for Self Assessment by October 5th if required
- Consider opting out of child benefit payments if you'll have to repay them
- Speak to a financial advisor if unsure about your situation
Expert warning: "Many parents don't realise this affects them until they get a letter from HMRC," says Sarah Coles, head of personal finance at Hargreaves Lansdown. "The changes have dragged thousands more families into the system."
