Child benefit opt out
The High Income Child Benefit Charge (HICBC) was introduced from 7 January 2013. It generally applies to a taxpayer who has ‘adjusted net income’ in excess of £50,000, where either they or their partner is in receipt of Child Benefit.
The effect of the charge is to claw back some or all of the Child Benefit paid. Where both partners have income in excess of £50,000 the charge applies to the partner with the higher income.
Adjusted net income is broadly gross income less pension payments and gift aid payments. Where a taxpayer has adjusted net income of £60,000 or more then the charge has the effect of cancelling out the Child Benefit paid. A sliding scale charge operates where income is between £50,000 and £60,000.
The charge applies to the Child Benefit paid from 7 January to the end of the tax year. However, the income taken into account will be the full income for 2012/13.
Child Benefit claimants had the option to elect not to receive Child Benefit if they or their partner do not wish to pay the new charge.
According to details revealed to the BBC some 270,000 people have opted out of receiving Child Benefit. Apparently there was a late surge of around 80,000 during the weekend before the deadline of 7 January 2013.
If you think you may be affected by this and would like to talk to some about your specific situation, please contact us today on either 02476 518 555 or 0121 711 2468.