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Child Benefit Changes – Does it affect you?
The new changes to the child benefit system have now come into effect. This means that more than a million families will lose some of all of their benefit, while many thousands of taxpayers will be required to file a self assessment tax return for the first time.
Although child benefit will continue to be paid as a tax-free universal benefit, under the new regime a ‘High Income Child Benefit Charge’ will be payable where either the claimant or their partner earns between £50,000 and £60,000. After this point the benefit will be fully removed.
If both partners have income in excess of £50,000, the charge applies to the partner with the highest income.
Where it is certain that the charge will apply, claimants have the option to elect not to receive the benefit. This is done by applying directly to HMRC.
Child benefit is currently paid at a rate of £20.30 a week for the first child, followed by £13.40 a week for each subsequent child.
Families affected by the measures are expected to lose an estimated £1,300 a year. If you would like to know more of how it impacts on you specifically, please just contact us.
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