Child Benefit Reductions – Know Your Benefit Charge

Following the Chancellor's initial plans in 2010 for the removal of child benefit for higher rate tax payers, the 2012 Budget statement confirmed that, with effect from 7 January 2013, child benefit will be clawed back, partially or fully, where one of the parties in the family has income for the year which exceeds £50,000. If you are currently receiving child benefit, may become entitled to it in the future, or someone else is claiming child benefit in respect of a child living with you, you should consider the following to see how the change may affect you.

Does this apply to you?

If you are receiving child benefit and your income, or partner's income, exceeds £50,000 then a clawback charge will apply. Also, a charge applies where you or your partner has an income exceeding £50,000 if you have a child living with you for whom child benefit is claimed by someone else, if neither the recipient's nor their partner's income exceeds this amount.