HM Revenue & Customs have announced that around one million letters will be issued during November to families who are potentially affected by the new high income child benefit charge that takes effect from 7 January 2013.
The new charge takes effect when a taxpayer’s or their partner’s income exceeds £50,000 during a tax year and either claim child benefit.
This tax charge is 1% of the child benefit for each £100 earned over £50,000 up to a maximum of 100% for people earning over £60,000.
The charge will be assessed on the higher earner and they will be required to complete a self-assessment tax return. It is estimated that half a million people will be brought into self-assessment for the first time.
It is also worth remembering that in this instance, you do not need to be married in order for the charge to apply.
Please contact us if you believe that this charge is going to affect you or your partner and we will be happy to give you any advice you require.