Child Benefit – changes to payments
If you or your partner receives Child Benefit payments, or someone else claims Child Benefit payments for a child living with you, and either you or your partner’s income is more than £50,000 a year changes came into effect on 7 January 2013 which may affect you.
From 7 January 2013 a tax charge will be applied of 1% of the Child Benefit for every £100 of income between £50,000 and £60,000 or the full amount of Child Benefit paid for income over £60,000. Therefore whoever has the highest income will have a tax charge and if their income is over £60,000 will have to repay all of the Child Benefit received.
You can elect not to receive the Child Benefit payments. If you choose to continue to receive payments you will have to complete a Self-Assessment tax return every year.
Should your income be below the National Insurance LEL threshold (£5,668 p.a. in 2013/14) we recommend you register for Child Benefit, even if you decide not to draw the payment, as this will protect your Pension Credits until the child reaches the age of 12.
Certain allowances such as the Seafarer’s allowance may reduce the taxable income used in assessing the entitlement to Child Benefit.
If you do not currently complete a tax return Meridian can assist with registering you for Self-Assessment and completing your tax returns for the future.