This controversial tax charge was introduced in 2013, following initial proposals announced by the then Chancellor George Osborne in October 2010 for withdrawing Child Benefit from higher-rate payers. The tax charge enables the Government to claw back Child Benefit through the tax system, from families where earners have an individual income of more than £50,000.
If two people in a household have an individual income of more than £50,000, then the person with the higher income of the two would be responsible for paying the tax charge.
So, what counts as income?
To calculate if the income is over the threshold, a person will need to work out their “adjusted net income”.
This is the total taxable income before any personal allowances and less things such as Gift Aid.
DON’T MISS
It’s possible to use the Child Benefit tax calculator to get an estimate of adjusted net income on the GOV.UK website.
If a person’s income is over the threshold, they will have two options.
This is either get Child Benefit payments and pay any tax charge at the end of each tax year, or to waive Child Benefit…
