High Income Child Benefit Tax Charge – How to Pay the Tax Charge

What is the High income child benefit tax charge? Do you know? For those persons who know what it is, do you know how it works or what its real purpose is? Well, I bet you don’t. If you would love to know more about this, then here is your chance. Continue reading the content of this post to find out.

High Income Child Benefit Tax Charge

High Income Child Benefit Tax Charge

The High-income child benefit tax charge or HICBC for short was introduced back in January 2013. This is a type of tax charge that applies just to anyone with an income of over 50,000 pounds who gets child benefits or whose partner gets child benefits. It really does not matter if the child living with you is yours or not.

You will need to work out your adjusted net income to easily work out or know if your income is over the threshold. What is your adjusted net income? This is your total taxable income before any personal allowances and other fewer things such as Gift Aid.

If in case your income is more than 50,000 pounds and also is your partner, then the person with the higher income is solely responsible for paying the tax charge, just in case you are wondering who is going to pay the tax.

Partner in this case is someone who you are not permanently separated from whom you are married to or in a civil relationship and partnership with or you are just living with as if you were. If however, your income is just over the threshold, you can opt to either get child benefit payments and then pay any tax charge at the end of each tax year. Or not get child benefit payments and then not pay the tax charge.

If in the event you select not to get child benefit, you can still fill in the child benefit claim form. You will however need to state on the form that you don’t want to get payments. You will however need to fill in the claim form if you want to get access to national insurance credit that normally counts towards your state pension.

You will also need to fill out the claim form if you want to make sure that your child gets their hand on a national insurance number automatically before they get to the age of 16, else they will need to apply for one themselves.

If however, you are already getting child benefits, you can choose to stop getting child benefits which is sometimes known as opting out, or continue getting child benefits and then pay any tax charge at the end of each tax year.

How to Pay the Tax Charge

To pay the tax charge, you must register for self-assessment and also fill in a self-assessment tax return each tax year and then pay what you already owe. If usually, you do not send a tax return, you will need to register by the 5th of October following the tax year that you need to pay the tax charge.

If on the other hand, you were unable to get information from your ex-partner or your partner, you should write to HM Revenue and customs to know whether they get child benefits if they have a higher adjusted net income than you. HMRC will not release any financial information to you but will rather reply to you with yes or no.

Stop Your Child Benefit

This is easy. You can fill in an online form to stop your child benefit or you can otherwise contact the child benefit office by post or by phone. To fill in the online form you will need a government gateway user ID and a password. If in the event that you do not have a user ID, you can easily create one when filling out the form.

If it is that you are using your child benefit to pay back and overpayment or certain benefits from other countries, you cannot stop your child benefit. After your child benefits stop, you must pay back the tax charge that is owed for each tax year up to the date that the benefits stop. And even after your child benefit payments stop, you must report any changes in your life that affect your entitlement to child benefits.

To learn more about restarting your child’s benefit and what to do if your circumstances change, check here.


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