HMRC to issue letters to those affected by Child Benefit changes

29th October 2012 | News

HM Revenue and Customs (HMRC) will be sending out letters in November to families that will be affected by changes to the Child Benefit next year.

In the one million letters it will be issuing over the coming weeks, the department will explain the High Income Child benefit Charge that will come into force from January 7th 2013.

When a taxpayer's - or their partner's - income is higher than £50,000 in a tax year, and if they or their partner receive Child Benefit, a charge will apply.

Income of more than £60,000 will include a tax charge that is 100 per cent the amount of Child Benefit, while those earning between £50,000 and £60,000 will see a gradual increase to a 100 per cent charge.

HMRC added in a statement: "Those affected will need to decide whether to keep receiving Child Benefit and pay the tax charge through Self Assessment, or to stop receiving Child Benefit and not pay the new charge.

"If their income is less than £60,000, the tax charge will always be less than the amount of Child Benefit, and they could lose money to which they are entitled if they stop receiving Child Benefit."

Those confused by the changes can consult a tax specialist, such as TaxAssist Accountants, for more information.

Posted by Thomas Fletcher