HM Revenue & Customs (HMRC) has urged Britons earning between £60,000 and £80,000 who claim Child Benefit to check whether they need to pay the High Income Child Benefit Charge (HICBC).
In a social media post, HMRC said: “Do you earn between £60,000 and £80,000 and claim Child Benefit? Check if you need to pay the High Income Child Benefit Charge. You may be able to use the new digital service to pay through your salary if you’re not in Self Assessment. It’s quick and easy with the HMRC app or online.”
What is the High Income Child Benefit Charge?
The HICBC is an income tax charge applied to Child Benefit claimants whose adjusted net income exceeds the £60,000 a year threshold. Adjusted net income is a person’s total taxable income, including savings interest and dividends. It is calculated before any personal allowances and less certain tax reliefs, such as pension contributions and Gift Aid.
According to HMRC, if you or your partner have a yearly adjusted net income of more than £60,000, you will have to pay some of your Child Benefit back. However, if you or your partner earn £80,000 or more, you will have to pay all of it back.
How the charge is calculated and paid
People must pay back 1% of their Child Benefit for every £200 they earn over the threshold. If your adjusted net income is over the threshold and so is your partner’s, then whoever has the higher income is responsible for paying the tax charge, HMRC guidance states.
If over the threshold, people can choose to either get Child Benefit payments and pay the tax charge or opt out of getting payments and not pay the tax charge. There are two ways to pay the charge: either through PAYE or through Self Assessment.
Who can claim Child Benefit
People can get Child Benefit if they are responsible for bringing up a youngster under 16 or under 20 but in approved education or training. Only one person can get Child Benefit for a child and there is no limit on how many children parents can claim for.
Child Benefit payments are usually paid every four weeks, with two different rates available. The weekly rate for the eldest or only child is £27.05, while for additional kids it is £17.90 per child.
