Child Benefit Changes

Important change if you or your partner have an individual income of more than £50,000 a year

From 7 January 201 3 if either you or your partner have an individual income of more than £50,000 a year, then the partner with the higher income will have to pay a High Income Child Benefit Charge on some, or all, of the Child Benefit you receive.  If these changes apply to you or your partner you should jointly decide whether to stop getting Child Benefit payments,and not have to pay a tax charge, or continue getting Child Benefit payments and declare them for tax purposes.
Filling in the Child Benefit claim form also ensures that you are registered to receive National Insurance credits which can help to protect your State Pension. It is therefore really important to fill, in the form if you have a new child in your family even if you do not wish to receive the Child Benefit payments. Part 4 of this claim form lets you tell, us if you want to be paid Child Benefit.

1. I have an income between £50,000 and £60,000. Should I still claim and be paid my Child Benefit?
The tax charge applies at a rate of 1 % of the Child Benefit paid for every £1 00 of income over £50,000. If you or your partner have an individual income between £50,000 and £60,000 the tax charge will be Less than the total amount of Child Benefit so you might like to keep getting Child Benefit payments and declare them for Income Tax purposes.

2. I have an income of more than £60,000. Should I still c.aim, even if I don’t want to be paid Child Benefit and not pay the tax charge?
If you or your partner have an individual income of more than £60,000 the tax charge will be equal to the total amount of Child Benefit so you might wish to stop receiving payments and not have to pay a tax charge. But it is really important to fill in the Child Benefit form if you have a new child in your family.

Completing the Child Benefit claim form ensures you are registered to receive National Insurance credits which can help to protect your State Pension and help your child get their National Insurance number.
For more information please read the notes with this form or go to www.hmrc.gov.uk/childbenefitcharge

ICAEW believes the changes could be an operational and reputational disaster for the government and HMRC. The ICAEW outlined their concerns to HMRC about the practicality of these reforms when they were published in HMRC’s initial consultation in summer 2011. The ICAEW repeated these concerns to HMRC, HM Treasury and parliament when the policy was proposed at the end of 2011 and again in their response to the Finance Bill 2012.