Earning over £50,000 and still receiving Child Benefit?
The High Income Child Benefit Charge was introduced on 7 January 2013 and affects families where someone has an income over £50,000. These families have two options: either to stop receiving Child Benefit payments, or to pay back some or all of the payments they receive through the tax system.
Some people chose to opt out of receiving Child Benefit before 7 January as an alternative to paying the tax charge. Those who didn’t stop their payments must register for Self Assessment by 5 October and complete a tax return to pay back some or all of the payments they have received during this tax year.
Child Benefit in 2013/2014
With the 2013-14 tax year about to start in April, high income families still receiving Child Benefit who don’t need to be in Self Assessment for any other reason can decide not to complete further tax returns beyond 2014. Those choosing to do so need to stop their Child Benefit payments by 28 March.
Those choosing to opt out now will still need to register for Self Assessment this year – by 5 October – but will only need to complete a tax return for the charge once – by 31 January 2014.
Families where someone has an income over £60,000 are more likely to want to stop their Child Benefit payments as the tax charge will be equal to the amount of Child Benefit received. Where the partner with the higher income has an income between £50,000 and £60,000 a year, they may wish to be paid Child Benefit as the extra tax charge will be less than 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.
Child Benefit Image
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