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Child Benefit – Avoiding the pitfalls

If you have an individual income over £50,000, and you or your partner receive Child Benefit, you may have to pay a “High Income Child Benefit Charge”. If both party’s income is over the £50,000 threshold, then whoever has the higher income is responsible for paying the tax. 

To work out if your income is over the threshold, you can use the Child Benefit tax calculator on the Gov.uk website

If your income is above the threshold you can choose to continue to receive the Child Benefit payments and pay any charge at the end of each tax year, to do this you will need to fill in a Self-Assessment tax return.

If you choose not to claim the payments you will still need to fill in the Child Benefit claim form if you want to receive National Insurance Credits.  National Insurance credits are important as they count towards your State Pension; to get the full State Pension you will need a total of 35 qualifying years of National Insurance contributions or credits. 

If Child Benefit is claimed then it is also important that the benefit is claimed by the non-working parent rather than the working parent, thus ensuring that the unwaged partner receives the National Insurance credits.

You can apply online to transfer a previous years National Insurance credits from one parent to another via the government’s website using form CF411A if you feel that the wrong parent has made the claim. 

Filling in a Child Benefit claim form also has the added advantage of making sure a child automatically receives a National Insurance number when they reach 16 years of age.

Always remember to inform HMRC of any change in circumstances.

Disclaimer: The information in this article is provided for general information only and does not constitute legal or professional advice.  We cannot accept responsibility or liability for any actions you may take, or not take, based on this information.

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