Child Benefit Charge Threashold

Okay. So the fifth of October, that’s fast approaching, well, maybe not that fast, but it’s coming very soon. And there is something sneaky that the government has done or the treasury has done or HMRC has done, that not many people are realizing affecting people earning over £50,000 per annum.

Now all the number of years going back, etc we’ve said that £50,000 or roughly thereabouts is your threshold for when you swap from being a 20% income taxpayer to a 40% income taxpayer. That’s been the case for the last couple of years until 2022/2023 tax year.

What HMRC has done is increase that for being a 20% threshold to a 40% threshold which we all cheered about (why it could not be more- hey ho). And as of this tax year (2021/2022 which is what we’re filing for at the moment),the threshold to paying 40% is currently at £50270. With me so far?

But for those of you that have children and claim the child benefit and get paid the child benefit, the threshold for when you become a higher income charge person and have to repay the child benefit is still stuck at £50,000. You could be just under the 40%  threshold at £50270 and not realize you have to register for the high income child benefit charge. why? Becasue that kicks in at £50,000.

Who is going to tell you this? Nobody.

And what you won’t realize is you have to register for a tax return & high income child benefit charge this by October 5th 2022 for the 2021/2022 tax year.

you might not even realize you’ve actually got that as a problem and you will have to repay some of the tax rate child benefit that you get.

So this is your heads up. If you earn over fifty thousand pounds, you will have to register for the high-income child benefit charge.

It doesn’t matter if your joint income is over £50,000, it’s your income over £50,000. The amount of repayment of the child benenefit is graduated between £50.000 and £60,000.

If it’s over sixty thousand pounds, then you have to repay all your child benefits that you’ve claimed, whether you’ve claimed it, or your partners claimed it.

Here is the calculator from HMRC which looks at how many children you have, how much you received and then the amount to pay back.

Register by the 5th October

So just be aware, the 5th October 2022 is when you have to make that registration. If you register late, there might be penalties and consequences.

If you don’t register at all, then HMRC will chase you down and they will hunt you and they will find you, penalize you, give you all sorts of penalties because you should have registered for doing a tax return. OK – so that may be over-dramatic, but they will try and write to you to tell you about it after the fact.

So there you go. A slight sneaky one that you might not know you’d be affected by.



The information contained in this document is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is provided or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situationLouise Herrington, Herrington Accounting Services t/as Performance Accountancy disclaims all liability and responsibility arising from any reliance placed on any of the contents of this article.

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