With effect from 7th of January 2013, child benefit will be reduced for families where one partner’s annual income exceeds £50,000.
The benefit will be reduced for income between £50,000 and £60,000 and will be lost completely if income exceeds £60,000.
If this applies to you, you will be expected to make a declaration on your self-assessment tax return and if you do not already complete a self-assessment tax return you may now need to complete one.
Pension contributions and charitable donations paid under the gift aid scheme are taken into account when calculating income for this purpose. It is therefore possible to reduce your income and the loss of child benefit by making such payments.
Individuals paying tax under PAYE can also apply to adjust their tax code to claw back over paid child benefit and thereby avoid the need to submit a self-assessment tax return.
If you are unsure of what this means for you or you wish to consider your options, then please contact us.
The information in this article was correct at the date it was first published.
However it is of a generic nature and cannot constitute advice. Specific advice should be sought before any action taken.
If you would like to discuss how this applies to you, we would be delighted to talk to you. Please make contact with the author on the details shown below.
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