HMRC Alerts Taxpayers to £200 Rule for Child Benefit Repayments
HM Revenue and Customs (HMRC) has issued a direct message to taxpayers, urging them to verify their financial details as they may be liable for a significant charge. The amount individuals are required to repay varies based on their earnings level, with specific thresholds triggering obligations.
High Income Child Benefit Charge Explained
In a social media post on X earlier today, April 12, HMRC stated: "Earning over £60k? Check if you need to pay the High Income Child Benefit Charge." This charge applies when taxpayers must return part or all of their Child Benefit claim, which is administered through the Department for Work and Pensions (DWP).
Child Benefit provides £27.05 weekly for the eldest or only child, plus an additional £17.90 weekly for each subsequent child. For a family with two children, this totals £44.95 weekly, equating to £2,377.40 annually. Payments are deposited into bank accounts every four weeks on a Monday or Tuesday, resulting in £179.80 per payment period for two children.
Repayment Thresholds and Calculations
However, once either you or your partner individually earns above £60,000, repayment of the benefit becomes mandatory. The repayment is calculated at a rate of one per cent of the entitlement for every £200 earned over the threshold. Consequently, when individual income reaches £80,000, the entire amount must be repaid.
How to Settle the Charge
HMRC has outlined methods for repaying the sum, noting: "Use the new digital service to pay through your salary if you're not in self assessment. It's quick and easy with the HMRC app or online." The tax authority has provided a link to further details on the Government website, where individuals can arrange repayment through their PAYE salary or via self assessment.
Taxpayers who need to submit a tax return for other reasons, such as being self-employed, must repay through self assessment. Alternatively, individuals can opt out of receiving Child Benefit payments entirely, a process that can be managed through the gov.uk website.
Benefits of Maintaining Registration
Opting out of payments does not cancel Child Benefit registration. Remaining registered is advantageous as it ensures eligibility for National Insurance credits that contribute towards the state pension. Additionally, children registered under the scheme are automatically issued a National Insurance number, eliminating the need to apply separately as they approach age 16.
Child Benefit can be claimed for children until they turn 16, or up to age 20 if they remain in education or training. This system supports families while ensuring high earners contribute appropriately through the repayment charge.
