Working in tax for longer than I am prepared to admit, the one constant is change, and increasing complexity. Many Governments have been and gone, promising simplification of the taxation system and the reality has been the opposite.
You can debate the moral implications of any tax change, and with the changes in child benefit which came into force on the 7th January 2013 will be one of the most heated, the merits of which will have been debated over many a Christmas dinner table.
Commentators have estimated the changes will affect over one million families in the UK.
What can not be debated is the change in the rules has created an unnecessary complex system for tax payers, the real beneficiaries of which are the Government with their reduced payments to claimants. Tax advisers and accountants those who can advise on it, and complete the additional self assessments for people who are in the £50,000 to £60,000 tax bracket and continue to receive child benefit, will have more work due to the change.
You may be liable to this new tax charge if you, or your partner, have an individual income of more than £50,000 and one of you gets Child Benefit. Once a parent earns above £60,000 the benefit is totally withdrawn and it is proportionately withdrawn between £50,000 and £60,000.
It is estimated there will be about half a million people in this bracket who will now need to complete a self assessment tax form to continue to receive child benefit.
The biggest losers will be London and the South East of England.
If your individual income is more than £50,000 and you, or your partner, choose to carry on getting Child Benefit payments, you will need to declare these payments by registering for Self Assessment and filling in a tax return. Find out more about who should declare, how and when.
You will be responsible for declaring the Child Benefit if either of the following applies.
If your partner’s income is more than £50,000 and your income is less than theirs they will be responsible for declaring the Child Benefit you receive.
You will need to declare the Child Benefit by filling in a Self Assessment tax return.
You will need to declare the amount of Child Benefit you, or your partner, are entitled to receive for that tax year providing your individual adjusted net income is more than £50,000.
If you or your partner are affected by the High Income Child Benefit charge and have decided to stop Child Benefit payments, there’s an online form to make your request. Only the person who is entitled to the Child Benefit payment can stop the payments. the payments.
If you or your partner has income over £50,000 talk to your Sherwin Currid Accountant who will be able to assist you in your best course of action.
Freelancer Accounting by Sherwin Currid Accountancy assists freelancers and contractors in London and the South East with their taxation and accounting requirements.