From January 2013, changes to the child benefit system have seen the reduction or loss of child benefit for households earning £50,000 or over.
Child benefit payments will continue, but for those with income between £50,000 and £60,000 HM Revenue & Customs will take the equivalent value back through a special new income tax charge on the higher income partner. The tax will equal 1% of the child benefit for every £100 of income above £50,000. So if you earn £55,000 you will lose 50% of the child benefit. If you have an adjusted net income of over £60,000 you will lose child benefit completely.
The HICBC will be assessed through self assessment of the highest earner. It is therefore necessary for the person liable to complete a tax return by 31 January 2014! This is where we come in. We can assist you (as always) with the self assessment. However we can also work with you to get a lower adjusted net income if need be, to avoid tax increases associated with the withdrawal of child benefit. If you feel the need to discuss this please do not hesitate to contact us!