In this video I discuss the new tax charge that has been introduced by the UK HMRC in 2013:
Hello, I’m James McBrearty. I’d like to talk to you today about the High Income Child Benefit Charge. Now this is something that has been introduced for 2013 and you may have seen things in the press or perhaps even have received a letter yourself from HMRC.
Now it only applies to people where their income or their partner’s income is over fifty thousand pounds a year. So if you’re below that you don’t have to worry. Once people’s income is exceeding that level then they’ve got two choices:
1. They can either continue to receive the benefit and then when the tax return is prepared an adjustment is made for the High Income Child Benefit Charge. To actually in effect pay back some of that child benefit that has been received.
2. The other option is to stop receiving the child benefits and that means that you do not have to report it on the tax return if you have not received any payments.
One of the things that is actually raised is that people not doing tax returns at the moment, might suddenly have to do tax returns just to report the child benefit and then to pay the charge on that. So it could bring a lot more people into self-assessment and actually requiring tax returns. So if you know anyone receiving that’s receiving child benefits they might want to look at actually preparing a tax return and that’s something I can help them with.
So, please do put them in touch and I will have a chat with them about it.