The High Income Child Benefit Charge can catch out the unwary. If you, or a partner, are claiming child benefit and one partner’s “Adjusted Income” breaches the £50,000 level, the child benefit starts to be clawed back through the tax system.
When income exceeds £60,000 the clawback is 100% of the child benefit received. Between £50,000 and £60,000 the clawback is 1% of child benefit per £100 of income.
It is possible to mitigate the clawback by pension contributions and ensuring you record all payments under Gift Aid.
Child benefit can be stopped by completing a form on the HMRC website. This avoids receiving monies in one hand and paying it all out again.
https://www.gov.uk/child-benefit-tax-charge/stop-child-benefit
This should be disclosed to HMRC via self-assessment. If you think this affects you and you need help, then talk with us today.