Child Benefit Tax
If you or your partner have an income greater than £50,000 and one of you is paid Child benefit you will be subject to the High Income Child Benefit tax charge.
The charge applies to any child benefit received after 7th January 2013.
If your income exceeds £60,000, you are no longer entitled to child benefit at all any child benefit received in a tax year must be repaid.
You are able to opt out of receiving child benefit or you can continue to receive it but must have registered for self assessment by 5th October 2013 and complete an annual self assessment tax return.
If you have not registered for self assessment you need to do so ASAP to avoid penalties.
If you income is between £50,000 and £60,000, there are various strategies available to you to effectively reduce your taxable income and therefore reduce your tax liability. Examples of these include making additional pension payments, gift aid payments or considering salary sacrifice.
* At Vanilla Online Accountancy, we keep things as simple and low cost as possible. So, if your only income is from employment and the only reason you have to register for self assessment is to pay the High Income Child Benefit tax charge we charge a flat fee of £75+VAT to complete your tax return.
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