Tamen Logo

Michael Sohor & Co is now known as Tamen Accountants. This is a name change only - we are the same dedicated team, and look forward to serving our valued clients for many years to come.

One of the more impactful changes in the recent budget was the easing of the High Income Child Benefit Charge. Up to 5 April 2024, this has been recovering Child Benefits received by parents if the total income of one or more parent exceeded £50,000.

Basically, parents with income between £50,000 to £60,000 have had to repay all or part of their Child Benefits to HMRC as part of their self-assessment return.

Unfortunately, the following change will not apply to the present 2023-24 tax year or earlier years.

But from 6 April 2024, the lower limit is extended to £60,000 and the upper limit to £80,000. Accordingly, if the highest earner has income in excess of £60,000, for every £200 their income exceeds £60,000 they will have to repay 1% of the Child Benefits received, and when their income exceeds £80,000, effectively all Child Benefits received will have to be repaid.

The mechanism that HMRC use to facilitate this recovery is called the High Income Child Benefit Charge (HICBC).

But what to do if you have been required to register for self-assessment for 2023-24 or previous years and the highest parental income for 2024-25 will be higher than the old £50,000 limit but lower than the £60,000 or £80,000 new limits?

Consider the following options:

  • If you have previously cancelled your Child Benefits, as the HICBC charge would have recovered any benefits received. Consider re-registering for Child Benefits if the income of the highest earning parent is under £80,000.
  • If you registered for self-assessment for 2023-24 or earlier years affected by the HICBC, and the income of the highest earning parent is now under the £60,000 lower limit, and as long as you are not required to submit a self-assessment return for any other reason, then you could apply to HMRC to withdrawn from self-assessment and the obligation to submit a formal tax return each year.

Share this post:

Looking for instant advice?

Our team are waiting to answer any question you may have via our live chat feature.

Socials

Contact our team

Call us on:

01204 391 505

Email us on:

mjs@tamenaccountants.co.uk

Related blog articles

27th Aug 24 | Updates/ News

Further drop in interest rates...

Interest rates are a powerful lever in our economy. Increase rates and economic activity tends...

Read more

22nd Aug 24 | Updates/ News

Rachel Reeves announcements since the el...

Since Rachel Reeves was appointed Chancellor of the Exchequer in May 2024, she has made...

Read more

20th Aug 24 | Updates/ News

Private pension contributions...

Tax relief on private pension scheme contributions is a significant incentive in the UK, encouraging...

Read more

Let us know your thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *