12 Days of Tax Tips: Day 1

12 Days of Tax Tips: Day 1

It’s that child benefit issue again. From 1st January 2013, child benefit was taken away from people earning over £50,000. Of course, you can still claim the benefit, but you may have to pay it back. Can be very harsh when only one person works.

Here is an example:
David & Sarah both earn £49,000 so have a total income of £98,000. They receive child benefit for their two children totaling £1,770. As they earn less than £50K as individuals, they get to keep the benefit.

James & Caroline: only James works and he earns £60,000 and they receive £1,700 child benefit for their children. However, as James earns over £50K, he effectively has to repay all the benefit as income tax by the 31st January.

TIME IS MONEY concept: alarm clock and lots of euro coins

 

So, if you earn over £50,000 and your household receives child benefit, you must complete a tax return and repay the benefit.

 

 

 

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