If you claim child benefit and you or your husband or wife, civil partner or partner you live with earns more than £50,000, you are liable to pay an additional tax charge.
This reduces child benefit by one per cent for every £100 of adjusted net income between £50,000 and £60,000. If both partners have an income of more than £50,000, the higher income partner pays the charge. Taxpayers with an income of more than £60,000 lose all child benefit.
Adjusted net income is based on factors including total income, including from employment and/or self-employment, pensions, property, savings and dividends, minus deductions such as gross pension contributions, trading losses and gross Gift Aid.
Moore Thompson’s tax specialists can provide expert advice to assist parents liable for the tax charge explore options that enable them to retain child benefit, for example by reallocating part of the higher earner’s income to their partner, increasing pension contributions, salary sacrifice schemes or even reducing working hours, while taking into account the implications for their overall finances.
For further details or to arrange a free, no obligation meeting, please contact a member of our child benefit tax charge team.
For more information on Moore Thompson Chartered Accountants in Spalding, Wisbech, Market Deeping, Cambridgeshire and Lincolnshire, please contact us.