Reminder to those with high income and child benefit
HMRC are reminding Child Benefit recipients with higher incomes that they have until Monday 7th January to decide whether to stop receiving the benefit or to pay a charge on it through self assessment.Lin Homer, HMRC’s Chief Executive, said: ‘Over 680,000 people have already looked at information on HMRC’s website that explains the changes and what steps those affected can take. It is really easy to use and will help families come to a decision.’ The High Income Child Benefit Charge (HICBC) is being introduced from 7 January 2013. It will mainly apply to a taxpayer who has ‘adjusted net income’ in excess of £50,000, where either they or their partner is in receipt of Child Benefit. The effect of the charge is to claw back some or all of the Child Benefit paid. Where both partners have income in excess of £50,000 the charge will apply to the partner with the higher income. Adjusted net income, which is broadly gross income less pension payments and gift aid payments, has the same meaning as for the withdrawal of the personal allowance for taxpayers with income above £100,000. Where a taxpayer has adjusted net income of £60,000 or more then the charge has the effect of cancelling out the Child Benefit paid. A sliding scale charge operates where income is between £50,000 and £60,000. The charge will apply to the Child Benefit paid from 7 January to the end of the tax year. However, the income taken into account will be the full income for 2012/13. Child Benefit claimants will be able to elect not to receive Child Benefit if they or their partner do not wish to pay the new charge. If Child Benefit recipients want to stop receiving the benefit, they should contact HMRC before 7 January 2013. Please visit the HMRC Child Benefit guidance link below for more details.