HMRC has issued an update about the High Income Child Benefit Charge, clarifying that claimants must use exact dates when using the online calculator to avoid discrepancies. The clarification came after a customer contacted HMRC with concerns about a mismatch between their manual calculation and the calculator's result.
Customer Query on Calculator Accuracy
The customer, who claimed Child Benefit mid-year after their child was born six months prior, reported that the calculator gave a lower figure than their manual calculation. They asked: "When using the Child Benefit tax calculator, it seems to provide a lower payment than my manual calculation. Which do I use? Is the calculator rounding down significantly? More than just the pence."
HMRC initially asked why the customer was trying to calculate the figure, and the customer explained they needed to pay the High Income Child Benefit Charge. HMRC then provided general guidance: "If you've received the benefit for a whole year without changes, the calculator should give the correct value."
Mid-Year Claims and Backdating
When the customer noted their claim started mid-year, HMRC responded: "Then your calculation may be more accurate if there was any backdating when you applied for the benefit." The customer confirmed they had entered the exact amount of Child Benefit received, but the calculator still rounded down by 68 pence compared to their manual calculation.
HMRC assured the customer: "You should be able to rely on it. You do need the exact dates for it to work." They added: "The calculator will give you the right figure, just make sure you're using the same start date as we used to calculate your claim." Regarding the 68p discrepancy, HMRC explained: "We don't tax fractions of a pound, so that's the right answer."
Who Has to Pay the Charge?
The High Income Child Benefit Charge applies when an individual income within a household exceeds £60,000 per year, for either the claimant or their partner. For every £200 earned above this threshold, 1% of the Child Benefit entitlement must be repaid. Once income reaches £80,000, the entire Child Benefit amount must be repaid.
How Much Can the Charge Be?
Child Benefit currently pays £27.05 per week for the eldest or only child, amounting to £1,406.60 per year, and £17.90 per week for each additional child, totalling £930.80 per year. For a household with two children and an individual income of £80,000 or more, the full repayment would be £2,337.40 per year.
HMRC's online Child Benefit calculator is available on the Government website to help claimants determine their repayment amount. Claimants are advised to have their exact claim start dates and total Child Benefit received ready for accurate calculations.
