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The High Income Child Benefit charge

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The High Income Child Benefit charge came into force on 7 January 2013 and applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of Child Benefit. The charge either reduces or removes the financial benefit of receiving Child Benefit. Where both partners have an income that exceeds £50,000, the charge will apply to the partner with the highest income.

The Child Benefit charge is levied at the rate of 1% of the full Child Benefit award for each £100 of income between £50,000 and £60,000. For taxpayers with income above £60,000, the amount of the charge will equal the amount of Child Benefit received. Taxpayers affected by the change have the choice of whether to keep receiving Child Benefit and pay the tax charge through self assessment, or may elect to stop receiving Child Benefit and not pay the new charge.

Taxpayers who wish to stop getting Child Benefit, rather than paying the charge, need to ensure that they stop the Child Benefit payments before 28 March 2013 in order to not be required to complete a Self Assessment return for the year 2013-14. Taxpayers choosing to opt out now will still need to register for Self Assessment for 2012-13 but will only be required to complete a tax return for the charge once, by 31 January 2014. This applies only to taxpayers that would not otherwise be required to complete a Self Assessment return.

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