Time is running out for Child Benefit Opt Out
The tax man announced that if you want to to stop receiving Child Benefit to avoid a High Income Child Benefit Charge (HIBC) you have to do it by Thursday 28 March 2013.
This is earlier than anticipated and may catch some higher rate tax payers on the hop. Many people thought the deadline would be 5 April to fall in line with the tax year.
if the individual wants to prevent a High Income Child Benefit charge (HICBC) being assessed on the person with the higher income.
What’s the problem?
Broadly, you might be liable to this new tax charge if you, or your spouse, civil partner or partner (who is not married but who is living with them), have an individual income of £50,000 or more and one of them receives Child Benefit. If both of you have an income of £50,000 or more, the charge will apply solely to the partner with the highest income.
This means you have to decide whether to opt-out from receiving Child Benefit if you are affected. If you do, your Child Benefit will be stopped immediately. If not, you’ll continue to receive Child Benefit, but the tax man will reclaim some or all of it from your income at the end of the tax year.
Even if you decide to opt-out from receiving Child Benefit you must still register to get a self-assessment tax return by 5 October this year. That means you have to declare your Child Benefit by 31 January 2014, so that the tax man can reclaim the benefit received between January and April 2013. If you don’t declare this it’s likely you’ll receive a penalty.
What do I need to do?
If you wish to opt-out from receiving child benefit you should take action as soon as possible.
There are ways in which you can hang on to some or all of your Child Benefit by making a pension contribution or charitable donation. If you’d like to chat through your options click here to arrange a meeting.
Steve Clark
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Copyright 2013