Child benefit

HMRC has published a reminder that high-earning child benefit recipients have a month to decide whether to stop receiving the benefit or to pay a charge on it through Self Assessment. The High Income Child Benefit Charge (HICBC) starts on 7 January, and will affect taxpayers with income of more than £50,000.

The new charge will apply when a taxpayer or their partner’s income is more than £50,000 in a tax year, and if they or their partner receives Child Benefit.

For those with income of more than £60,000, the tax charge is 100 per cent of the amount of Child Benefit. If income is between £50,000 and £60,000, the charge is gradually increased to 100 per cent of the Child Benefit.

Those affected will need to decide whether to keep receiving Child Benefit and pay the tax charge through Self Assessment, or to stop receiving Child Benefit and not pay the new charge. If their income is between £50,000 and £60,000, the tax charge will always be less than the amount of Child Benefit, so they could lose money to which they are entitled if they opt to stop receiving Child Benefit. If Child Benefit recipients want to stop receiving the benefit, they should contact HMRC before 7 January.

Further information is available from HMRC.