{"id":439,"date":"2017-11-14T00:00:00","date_gmt":"2017-11-14T00:00:00","guid":{"rendered":"https:\/\/taxbak.co.uk\/index.php\/2017\/11\/14\/child-benefit-tax-trap\/"},"modified":"2017-11-14T00:00:00","modified_gmt":"2017-11-14T00:00:00","slug":"child-benefit-tax-trap","status":"publish","type":"post","link":"http:\/\/taxbak.co.uk\/index.php\/2017\/11\/14\/child-benefit-tax-trap\/","title":{"rendered":"Child benefit tax trap"},"content":{"rendered":"<p>A family claiming the weekly Child Benefit (currently, &pound;20.70 a week for eldest or only child and &pound;13.70 a week for additional children) may get an unwelcome tax bill if either parents&rsquo; income exceeds &pound;50,000 during a tax year.<\/p>\n<p>A tax charge was introduced a number of years ago, known as the &lsquo;High Income Child Benefit Charge&rsquo; (HICBC), if either parent had income over &pound;50,000 and:<\/p>\n<ul>\n<li>either partner received Child Benefit, or<\/li>\n<li>someone else received Child Benefit for a child living with you and they contribute at least an equal amount towards the child&rsquo;s upkeep.<\/li>\n<\/ul>\n<p>It doesn&rsquo;t matter if the child living with you is not your own child. The charge was introduced to recover Child Benefits from higher income earners.<\/p>\n<p>You may not have considered the HICBC before if your incomes were below the &pound;50,000 cap, but if your income for 2017-18 is likely to exceed this amount you should be aware of the following.<\/p>\n<ul>\n<li>Before 6 October 2018, the parent with the higher income for 2017-18 (more than &pound;50,000) will need to register to submit a self-assessment tax return and pay and HICBC due &ndash; unless they are already registered in which case they will need to enter the amount of Child Benefit received on the return and pay any tax due.<\/li>\n<li>The parent with the higher income, even if they were not the person claiming the Child Benefit, will need to make this declaration.<\/li>\n<\/ul>\n<p>1% of the Child Benefit received will be recovered by HMRC&rsquo;s HICBC for every &pound;100 the highest earner&rsquo;s income exceeds &pound;50,000. Accordingly, once the highest income exceeds &pound;60,000 all the Child Benefits received will be reclaimed.<\/p>\n<p>To avoid the charge, it is possible to decline Child Benefits in the first place. To summarise:<\/p>\n<ul>\n<li>Parents where the highest income is below &pound;50,000 will not be affected and can continue to claim Child Benefit with no tax claw back.<\/li>\n<li>Parents where the highest income is above &pound;50,000 but below &pound;60,000 will be affected and will need to pay the appropriate HICBC.<\/li>\n<li>Parents where the highest income is over &pound;60,000 may be advised to decline future Child Benefit claims as all benefits received will be clawed back by the HICBC.<\/li>\n<\/ul>\n<p>There are strategies that you could use to reduce your taxable income below the &pound;50,000 or &pound;60,000 thresholds as these are calculated net of any allowable deductions. Please call if you would like more advice regarding these deductions.<\/p>\n<!-- -->","protected":false},"excerpt":{"rendered":"<p>A family claiming the weekly Child Benefit (currently, &pound;20.70 a week for eldest or only child and &pound;13.70 a week for additional children) may get an unwelcome tax bill if either parents&rsquo; income exceeds &pound;50,000 during a tax year. A tax charge was introduced a number of years ago, known as the &lsquo;High Income Child [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-439","post","type-post","status-publish","format-standard","hentry","category-uncategorized","blog-left-layout","blog-style-postblock","","blog-alt-odd"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=439"}],"version-history":[{"count":0,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/439\/revisions"}],"wp:attachment":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=439"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}