Do I have to pay tax on my child benefit? 10 tips on the high income child benefit tax charge

You may have heard of people having to pay back child benefit, or having to complete a personal tax return, just because they receive child benefit. Perhaps we’ve asked you about your child benefit because we’re completing your tax return?

Child benefit isn’t usually taxable, so today’s blog sets out the when child benefit needs to go on your tax return, and when you might have to pay tax on it.

1. But first of all: What is child benefit and who gets it?

Child benefit is paid in the UK to all parents with children, and is based on the number of children you have. The rates for 2019/2020 are as follows, but they may change each year:

Your first born child: £20.70 per week

For additional children: £13.70 per week

2. How often do you get it?

It’s paid every 4 weeks, but you can ask for it weekly if you’re on income support.

3. Is it taxable?

Child benefit is not normally taxable, and does not normally go on your personal tax return, unless you or your partner earn over £50,000 in one tax year.

4. What happens if one of us earns over £50,000?

In this case the one earning over £50,000 has to complete a tax return, and enter the amount of child benefit received on the tax return, and pay any additional tax due.

5. What tax do I pay?

This depends on how much you earn over £50,000, and the tax is called the “High Income Child Benefit Tax Charge”.

HMRC have a handy online calculator to help you work out how much tax you would pay. If we’re preparing your tax return for you, we will let you know how much tax you have to pay.

6. How is the tax calculated?

If we’re completing your tax return you don’t need to try to work this out, as we will calculate the tax charge for you.

The tax charge depends on how much you earn between £50,000 and £60,000 as follows:

Above £60,000: The tax charge is the same as the child benefit you or your partner have received

Over £50,000 but below £60,000: The tax charge is calculated as 1% of the child benefit received, for every £100 above £50,000.

Here’s an example:

Maurice earns £55,000 in the tax year, and his partner June received £1,789 for their 2 children.

Maurice has earned £5,000 over £50,000.

  1. Divide £5,000 by £100 = 50
  2. Find 1% of £1,789 = £17.89
  3. Multiply 50 by £17.89 = £894.50
  4. Maurice’s High Income Child Benefit Tax Charge is £894.50

7. When do I have to pay the tax?

For each tax year ending 5 April, you have until the following 31 January to submit your tax return and pay any tax.

So for 5 April 2019, you have until 31 January 2020 to pay the tax and submit your return.

8. I no longer live with my partner, do I still have to pay?

If one of you looks after the children yes you do still have to declare the child benefit and pay the tax.

9. I live with my partner who has her own children, do I still have to pay?

Yes you do if you earn over £50,000

10. How can I stop the tax charge?

If you know you’re going to be earning over £60,000 each year, then you can ask to stop receiving the High Income Tax Benefit Charge.

Here is HMRC’s application form to stop child benefit payments

And HMRC’s form to restart child benefits again.

There’s lots more guidance from HMRC here and of course you can always ask us!

Thank you for reading!


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