Child Benefit & Self Assessment
The new High Income Child Benefit tax charge was introduced on 7 January 2013 by HMRC.
This means that there now may be a need for you to complete a self assessment tax return.
So am I affected and do I need to complete a self assessment return?
For the purposes of the High Income Child Benefit tax charge, HMRC stipulate that you will be affected by the charge and required to complete self assessment if:
You will also be affected if during a tax year you have an individual income of more than £50,000 and both of the following apply:
It doesn’t matter if the child that is living with you is not your own child.
Your income will generally be your income before tax and deduction of ‘Personal Allowance’.
How does the tax charge work?
The amount of tax charged is dependent on the amount of Child Benefit entitlement and the level of your ‘adjusted net income’.
The tax charge will also differ depending on your income.
If you earn between £50,000 & £60,000, the tax charge is 1% of the full Child Benefit on income between £50,000 and £60,000.
If however your individual income is £60,000 or more, then the tax charge will be equal to the full amount of Child Benefit you or your partner received, irrespective of who receives the benefit.
So what do I do and how to I go about it?
You will need to choose to do one of the following:
If you decide to stop the Child Benefit payments, you will:
Only the person who is entitled to Child Benefit can stop the payments.
Self Assessment and how we can help
For the year ended 05 April 2013, you need to complete a self assessment form before 31 January 2014.
In order to do this you can either register by using the following link Self Assessment Registration
Alternatively, speak to Craig at Pure Contractor Accountants on 01942 734455 or email firstname.lastname@example.org