Helen Hughes Accountancy | Household Income over £50,000 and Claiming Child Benefit?
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Household Income over £50,000 and Claiming Child Benefit?

15 Mar Household Income over £50,000 and Claiming Child Benefit?

If you or your spouse (or live in partner) earn over £50,000 and claim child benefit – you may need to complete a self-assessment tax return. Earnings between £50,000 and £60,000 allows some payments of child benefit but the amount payable is reduced as your earnings reach £60,000. You have two main options, either contact the HMRC and state that you no longer wish to receive child benefit or accept the benefit and complete a self-assessment tax return each year with a view to repaying some of the benefit where your salary lies somewhere between £50,000 and £60,000.

People with an income over £60,000 whose family is still receiving Child Benefit should opt out before 28 March if they wish to avoid filling in a tax return and repaying the benefit for the 2013/14 tax year.

Latest HMRC figures show that over 365,000 people have opted out of Child Benefit since the High Income Child Benefit Charge was introduced on 7 January. Those who have already stopped their Child Benefit payments do not need to act.

People who continued to receive Child Benefit after January need to register for Self Assessment by 5 October 2013 to repay the benefit received between January and April 2013, but opting out now means they will not need to fill in a tax return in future years.

Lin Homer, Chief Executive at HMRC, said: “Anyone wanting to opt out of Child Benefit payments can do so at any time. It is really easy – just go to our website. Anyone with an income over £60,000 who has received Child Benefit since January needs to register for Self Assessment by 5 October to repay some or all of this year’s benefit, but if they opt out now this will be a one-off.”

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

The decision to stay in or opt out of receiving Child Benefit payments is not final, and families are free to change their minds. Anyone earning over £50,000 who has received Child Benefit since 7 January 2013 will need to register for Self Assessment and complete a tax return for that period, regardless of whether they are now opting out.

Sourced from The International Assocation of Bookeepers

If you require any further advice or information about your own individual position, please don’t hesitate to use the ‘contact us’ page of the Hughes Accountancy website.