Caught By The High-Income Child Benefit Charge?
Why you should still register ...
POSTED BY HELEN BEAUMONT ON 05/06/2019 @ 8:00AM
If you've been affected by the High-Income Child Benefit Charge (HICBC) then you could be forgiven for thinking that there's no point in registering ...
HMRC don't tell you about the High-Income Child Benefit Charge!
copyright: bowie15 / 123rf
Last August, I wrote about HMRC and the High-Income Child Benefit Charge. HMRC are clawing back 1% for every £100 you or your partner are earning above the £50,000 threshold.
"HMRC doesn't tell you about HICBC, and it's
an easy trap to fall into!"
Although a 20% fine doesn't seem that bad, imagine you have multiple children and you have claimed Child Benefit over multiple years whilst earning more than £50,000? That amount could really add up!
The confusing thing here is that claiming Child Benefit confers state pension rights too. Parents who register for it in respect of a child who is under 12 get Class 3 National Insurance credits. A person needs to have 35 qualifying years for the full, single-tier state pension.
So, if you don't register for it, you could be missing out on at least 12 qualification years, which is especially important for stay-at-home parents or for those working part-time.
Remember though, if you or your partner earns above the £50,000 threshold, HMRC will claw some or all of it back. But you still need to register, and then tell them if you don’t want to receive it. If your income is between £50,000 and £60,000 it is worth claiming and then paying the HICBC as the amount you pay back will be less than the benefit received.
And one last point, registering for Child Benefit ensures your child will receive a National Insurance number automatically at the age of 16, without you needing to apply for one.
"Would you like to know more?"
The High-Income Child Benefit Charge is a bit complicated and it's an easy trap to fall into. If you'd like to find out more about HICBC then do give me a call on 01908 774323 or click here to ping me an email and let's see how I can help you.
Until next time ...
If you're looking to work with an expert tax advisor with a wide range of tax experience, do visit www.essendontax.co.uk to find out more about me and discover how I can help!
More about Helen Beaumont ...
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen’s specialist knowledge in tax planning and experience ensures every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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