Child Benefit Changes & Self Assessment

January 11th, 2013  |  Published in Latest News

From 7 January, half a million new people will be required to complete a Self Assessment tax return for the year ending 5th April 2013 after the new high income child benefit charge (HICBC) is introduced.

Of 700,000 households where one person earns more than £60,000, only 200,000 met the deadline to opt out of Child Benefit – the rest will be required to join the Self Assessment system.

Opting out after 7 January will still leave a 2012/13 HICBC based on the child benefit received after that date. The HICBC equals 1% of the child benefit paid for every £100 of income between £50,000 and £60,000. Those who continue to receive child benefit will have to repay some or all of it at a later date via the HICBC.

If you’re in the borderline area between £50,000 and £60,000 you might want to consider if there’s anything you can do to get your taxable income down, such as making more gift aid payments, pension contributions, or consider taking a salary sacrifice. If you’re joining the Self Assessment system for the first time, call me, we’re here to help you.

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