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Child Benefit opt-out looms

The deadline is approaching for families with one parent earning more than £50k to decide whether to opt out of Child Benefit

NASDAL is reminding its dentist clients that the 7 January deadline is nigh.

If you are a parent in the high income bracket and you do not opt out, you will have to pay back some or all of the benefit via a new High Income Tax Benefit Charge (HITBC).

Chancellor George Osborne announced the tax charge on Child Benefit in 2010 with an introductory date of 7 January 2013. From this date, if one parent earns between £50k and £60k, the tax will be less than the Child Benefit but if it’s over £60k, it will be the same as the child benefit.

Ian Simpson, NASDAL member and a partner in specialist dental accountants Humphrey & Co, advises that if your income fluctuates between £50,000 and £60,000 a year, it will be best to carry on receiving the Child Benefit and paying the charge as and when is appropriate through a self-assessment Tax Return.

He also advises:

  • the tax charge applies where the individual income is £50,000+, not joint income
  • the child does not have to be your child for you to be affected by this charge
  • a Child Benefit claim form still needs to be completed when a child is born as this helps the claimant qualify for credits to protect their State Pension.

        Ian said: 'This is a confusing change to the previously universal Child Benefit scheme which we anticipate will be costly to administer and mean more people will need to file self-assessment tax returns.'

 

Please contact Ian Simpson via email isimpson@humph.co.uk for further information on the changes. To find a NASDAL member in your area, go to www.nasdal.org.uk

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