High Income Child Benefit Charge
Over the next few weeks I suspect a few people will receive letters from HM Revenue and Customs telling them that they should have completed 2012/2013 tax returns as they received child benefit from 7 January 2013 to 5 April 2013, and they now have High Income Child Benefit Charge. If this is you, you may be wondering what this is about.
From 7 January 2013, if you or your partner are in receipt of child benefit and have income over £60,000 you have to repay the child benefit. The higher earner will have to complete a tax return through which any child benefit you have received will be deducted by way of a tax charge. Anyone earning between £50,000 and £60,000 will have their child benefit reduced. HMRC are using the income level after reliefs have been deducted, eg pension relief and gift aid relief.
If you or your partner had an income above £50,000 for the 2012/2013 tax year and you received child benefit between 7 January 2013 and 5 April 2013 you will have to complete a tax return. We can assist with this.
On an ongoing basis, if you or your partner has income in excess of £60,000 you may decide to stop receiving child benefit. If you prefer to receive child benefit and repay it at the end of the tax year as a tax charge, or your income level is between £50,000 and £60,000, we can assist with preparing your tax returns.