High Income Child Benefit Charge deadline 31 January People who receive Child Benefit and earn over £50,000 may have to pay a tax charge known as the High Income Child Benefit Charge. If your clients are liable for the charge then they may need to file a tax return before the 31 January deadline. Telling your clients about the High Income Child Benefit Charge may help them to understand their obligations and avoid facing a penalty.
• check their annual income, either on their P60 or personal tax account
• if their pay was just below £50,000, check what taxable benefits were provided by their employer as it counts as income and could take their income over the threshold
• use the child benefit tax calculator to work out if they’re affected by the tax charge • notify HMRC and register for Self-Assessment online if they have not already done so
• complete a Self-Assessment tax return by 31 January and pay what they owe.
Even if your clients have to pay the charge, they could still be better off by claiming Child Benefit. The tax is 1% of Child Benefit for each £100 of income over £50,000. If your income is over £60,000 the total HICBC will be equal to the Child Benefit you receive. Pension contributions and payments to charities are not included in income but salary and taxable benefits-in-kind, such as a company car are. People have the option to opt out of receiving Child Benefit payments so they won’t have to pay the charge for future tax years. If they do this, they will still accrue credits towards their pension.