Child benefit is a government allowance paid to one person in the UK responsible for bringing up a child under the age of 16 (or under 20 if they are in approved education or training). In this article, we will provide a comprehensive guide on Child Benefit, including why to claim it, the amount you may receive, and what it means for you if either you or your partner earn over £50,000.
Benefits of Claiming Child Benefit
By claiming Child Benefit, you can receive an allowance for each child, usually paid every 4 weeks. Additionally, you will receive National Insurance credits if your child is under 12, which count towards your State Pension and help ensure that you do not have gaps in your National Insurance record. Furthermore, your child will receive a National Insurance number without having to apply for it.
Even if you choose not to receive Child Benefit payments, it is still recommended to fill out the claim form to receive these additional benefits. The amount you receive will depend on the number of children you have and can change each tax year.
High Income Child Benefit Charge
If either your or your partner’s adjusted net income is over £50,000 per year, you may have to pay the High Income Child Benefit Charge. This amount will not exceed the benefit received, but if your adjusted net income is over £60,000 per year, you will be charged the full amount of the benefit and receive no extra money from Child Benefit.
To pay this charge, the highest earner must submit a self-assessment tax return each tax year, unless they opt out of receiving Child Benefit payments. Your adjusted net income is calculated as your total taxable income (before any Personal Allowances) minus certain tax reliefs such as charity donations and personal pension contributions.
Opting Out of Child Benefit Payments
If you wish to opt out of Child Benefit payments, you can do so by filling out an online form via your government gateway account or by contacting the Child Benefit Office at 0300 200 3100. You can also choose to restart Child Benefit if your circumstances change.
What Does This Mean for You?
If you have a child, it is important to register for Child Benefit, even if you opt out of receiving payments. If your or your partner’s adjusted net income is over £50,000 per year, the highest earner must complete a self-assessment tax return to pay the Child Benefit charge. Additionally, you may want to save some of the Child Benefit payments received to pay this charge.
If your or your partner’s adjusted net income is over £60,000 per year, you may want to consider opting out of receiving Child Benefit payments. However, you will still receive the other benefits, such as National Insurance credits.
In conclusion, Child Benefit provides a range of benefits to parents and caregivers in the UK, including an allowance for each child, National Insurance credits, and a National Insurance number for your child. If either you or your partner earn over £50,000 per year, you may have to pay the High Income Child Benefit Charge, which can be calculated based on the number of children and the rates for the relevant tax year. If your adjusted net income is over £60,000 per year, you may want to consider opting out of receiving Child Benefit payments, but still receive the other benefits provided by Child Benefit.
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