One month to Child Benefit changes
The High Income Child Benefit Charge (HICBC) will affect parents who earn more than £50,000 and will come into force from 7th January.
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% of the amount of Child Benefit.
If income is between £50,000 and £60,000, the charge is gradually increased to 100% 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 HMRC says that 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.