Beware the High-Income Child Benefit Charge

You may have to pay the High-Income Child Benefit Charge!
if you or your partner have an individual income that’s over £50,000 and either:
⦁ you or your partner get Child Benefit
⦁ someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep
It does not matter if the child living with you is not your own child.
Child benefit is effectively withdrawn at a rate of 1% for each £100 earned by the higher-income partner over £50,000 a year. Therefore, the benefit is fully withdrawn where income of the higher-income partner reaches £60,000 a year. These figures apply for each tax year – so you have to look at your income for the year starting on 6 April one year through to 5 April the next year.

This is unfortunately one of those situations which seems unfair. A taxpayer earning over £50,000 but the spouse earning nothing is affected by the charge, but a couple earning £50,000 each do not suffer the charge.

If you want to know how this might affect you, please contact us. You may have to register for self-assessment to notify HMRC.