High Income Earners Must Re-Register for Child Benefit
Have you passed the threshold?
Posted by Roger Eddowes on 15/04/2024 @ 8:00AM
The High Income Child Benefit Charge (HICBC) was introduced in 2013 to limit the financial support provided to high income families through child benefit. Under this charge, individuals earning over £50,000 per year were required to pay back a portion of their child benefit through their tax returns ...
Protect your finances by taking the necessary steps to re-register for child benefit by the 5th of July!
This charge was increased to £60,000 from the 6th of April 2024, to take account of wage inflation and benefit more families. However, what many people may not be aware of is the need to re-register for child benefit if they fall under this new threshold by 5th July 2024.
"Child benefit is not means-tested so all families with eligible children are entitled to receive it!"
This benefit is paid to the main carer of a child under the age of 16 (or 20 if they are in full-time education or training). The amount received depends on the number of children in the family, with an additional amount for each child after the first. For many families, this benefit can make a significant difference in their monthly budget.
High income earners may be required to pay back some or all of their child benefit through their tax returns. The payback threshold starts at £60,000 and tapers for every £200 by 1% until it reaches £80,000 where the charge is equal to the amount of the child benefit payment.
It is also worth noting that the HICBC is calculated based on the highest earner in a household. This means that if one partner earns over £60,000 and the other earns less, the higher earner is responsible for paying back the child benefit received!
Another important aspect to consider is the impact on National Insurance contributions. Re-registering for child benefit can help individuals continue to receive National Insurance credits, which can count towards their state pension.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the high income child benefit charge, it may be a great idea to call me on 01908 774320 and let's see how I can help you.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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