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Child Benefit and Protecting State Pension

This article has been extracted from this month’s HMRC Employers Bulletin for your information:

We would like to take the opportunity to remind all parents of the importance of making a claim for child benefit regardless of income levels to make sure they don’t miss out on some important benefits for them and their child.

If parents are part of a couple and one of them works and pays National 
Insurance contributions (NICs) and the other one stays at home to care for a child, the person who is not paying NICs can protect their State Pension by completing the Child Benefit form. Completing the form also helps a child to automatically get their National Insurance Number at age 16.

For parents where one or both have an individual income of more than £50,000, they may be liable for the High Income Child Benefit Charge (HICBC), a tax charge on the Child Benefit payments received. The person who pays the tax charge could be different to the person receiving payments. Some people may decide not to receive the payments to avoid paying the charge.

Either way, it is important that people fill in and submit the Child Benefit form, even if they decide not to take Child Benefit payments, in order to protect their entitlement to the State Pension and to help their child receive their National Insurance Number at age 16.

If you and your partner both have an individual income of less than £50,000 
You will not need to pay the tax charge. If your or your partner’s income goes over £50,000 in any year, check if you have to pay the tax charge https://www.gov.uk/child-benefit-tax-calculator

The person with the highest income has income between £50,000-£60,000
If you or your partner decide to get Child Benefit payments, the person with the higher income must notify HMRC by registering for Self-Assessment to pay the tax charge each year. It will be less than the amount of the Child Benefit you get. The tax charge will not apply if you decide not to get Child Benefit payments (select “no” on question 68).

The person with the highest income has income of more than £60,000
If you or your partner decide to get Child Benefit payments, the person with the higher income must notify HMRC by registering for Self-Assessment to pay the tax charge each year. It will be the same as the amount of the Child Benefit you get. The tax charge will not apply if you decide not to get Child Benefit payments (select “no” on question 68).

More information on Child Benefit and the High Income Child Benefit Charge can be
found on GOV.UK https://www.gov.uk/child-benefit
and https://www.gov.uk/child-benefit-tax-charge


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