HMRC revealed parents may have an ‘easier way’ to pay the department
Parents who have to pay the High Income Child Benefit Charge may be able to make the process ‘easier’ for themselves by making one phone call to HMRC. The Department issued an alert earlier this month noting that parents who have received a pay rise this month could now be liable for the charge.
Parents that earn over £60,000 and claim Child Benefit usually have to pay a percentage of their benefit back to HMRC through tax. This can be done by filing a Self Assessment tax return but if this charge is the only reason you’re filing, HMRC shared: “There’s now an easier way.”
If you don’t have other reasons for filing the tax return, such as being self-employed, you may be able to get HMRC to simply change your tax code instead.
This means your High Income Child Benefit charge will be incorporated into the tax charges that are automatically taken from your income through PAYE. Allowing you to skip the annual returns.
Over 1.4 million parents and carers claim Child Benefit. It offers £26.05 weekly for the eldest child and £17.25 for each subsequent child, paid every four weeks.
If you or your partner earns over £60,000 you will have to pay a portion of this benefit back to HMRC relevant to your income, known as the High Income Child Benefit Charge. Once you reach £80,000, you’ll have to pay back the entire sum.
However, this doesn’t mean people have to cancel their claim outright. The benefit still provides other support like National Insurance credits even if you don’t recieve any payments from it.
These credits count towards your state pension and can be a lifeline for people who are not working or not earning enough to pay National Insurance contributions while raising children. For the full new state pension you need around 35 years worth of these credits or contributions.
Even if you do not need the credits, you may be able to transfer them to your partner or a family member that provides care for your child. Only one person can get Child Benefit for a child but there’s no limit as to how many children you can claim for.
Putting a claim in for Child Benefit will also provide a National Insurance number for your child without them having to apply for one. They’ll usually get this number shortly before they turn 16.
It’s worth noting that this is for individual income, not your combined income in the household. If both you and your partner’s income is over the threshold, then whoever has the higher income is responsible for paying the charge.
The Gov.uk website has a Child Benefit tax calculator which can help people figure out how much of their Child Benefit payments they will need to pay back if their earnings are over the threshold.
