Child Benefit Claw Back
The high income child benefit charge (HICBC) was introduced in January 2013 to claw back child benefit where the highest earner in the family has total net income of £50,000 or more. The full amount of the benefit is clawed back if one of the parents has income of £60,000 or more.
If this applies to your family you must tell HMRC that you need a tax return in order to self assess the HICBC. Although HMRC manages claims for child benefit, it does not know who the higher earning partners of those claimants are.
Many parents are not aware of the need to pay the HICBC. If your income rises above £50,000, HMRC does not prompt you to pay it. Some parents were issued with penalties for failing to notify HMRC of the need to pay HICBC and one taxpayer challenged his penalty and won.
HMRC has now decided to refund some parents for the penalties they were charged for failing to notify their liability to pay the HICBC for the tax years 2013-14 to 2015-16. To qualify for a refund your family must have started to receive child benefit before 7 January 2013. The penalty will be refunded automatically; you don’t have to contact HMRC.
If you need to pay the HICBC for 2016-17 or a later year you still need to inform HMRC of this liability. You can amend your self assessment tax return online for 2016-17 and 2017-18 to pay the charge, or we can do this for you.