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4w ago

HMRC Reclaims Child Benefit From Households Earning Over £60,000

The charge makes people with adjusted net income above £60,000 repay part or all of the £1,406 yearly Child Benefit through a tapered tax charge.

Child benefit rules can be complex (Gareth Fuller/PA Wire)
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Overview

  • Regional coverage over the weekend of May 23–25 restated HMRC guidance that households face the High Income Child Benefit Charge if either partner’s adjusted net income exceeds £60,000.
  • The charge reduces Child Benefit by 1% for every £200 of income between £60,000 and £80,000 and reaches 100% repayment at £80,000.
  • Child Benefit is worth £1,406 a year so a claimant can have up to £1,406 reclaimed and the partner with the higher adjusted net income is the one who must pay the charge.
  • A recent report shows a low take-up of a new PAYE collection option introduced at the last Budget, meaning most eligible employees still use self-assessment rather than having the charge taken from their pay.
  • HMRC offers online calculators and claimants can reduce liability by increasing pension contributions or by still claiming Child Benefit to secure National Insurance credits for the state pension.