High Income Child Benefit Charge

Recent press coverage has highlighted a new High Income Child Benefit Charge (“HICBC”) to claw back child benefit paid to those earning over £50,000 per annum. This tax charge applies from 7 January 2013 and HM Revenue & Customs have now written to all taxpayers in this earnings bracket to advice of the new charge.

The HICBC applies to couples living together, whether married or not, where either or both parties receive child benefit and earn over £50,000 per annum. Where both parties earn over £50,000, the HICBC will be payable by the highest earning partner and will normally be collected through the self assessment system. The HICBC will be pro-rated for couples not living together for the complete tax year. This means in the 2012/13 tax year at least, the preparation of a tax return will be required to calculate the charge by anyone affected.

For more information or if you have any questions, please don’t hesitate to contact us.