Child Benefit UK: The payment is tax-free but some will face tax charge – do you?

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CHILD BENEFIT is a payment which is paid to claimants usually every four weeks. Recipients don’t have to pay Income Tax on it, however they may be subject to another type of tax.

How much is Child Benefit?

Child Benefit is often a welcomed additional form of income to those raising a child or children. While it can only be claimed by one indvidual for a child, there’s no limit as to how many children an eligible person can claim for.

A person can get Child Benefit if they’re responsible for bringing up a child who is under the age of 16, or who is under 20 if they stay in approved education or training.

How much is Child Benefit?

There are two different rates for Child Benefit, with the one that is paid being dependent on who the allowance is for.

For instance, for an eldest or only child, the weekly rate is £21.05.

This drops to £13.95 per child per week for any additional children.

In the event that a person is paid too much or too little, they must contact the Child Benefit Office.

The payment is usually paid every four weeks on a Monday or Tuesday.

Some may wonder whether this form of income will affect the amount of Income Tax they paid.

Gov.uk sheds some light, categorising Child Benefit as a tax-free state pension which is among the “most common state benefits you do not have to pay Income Tax on”.

That said, on the same list, it’s explained that Child Benefit is income-based.

The tax that may apply is known as the High Income Child Benefit Tax Charge (HICBC).

It kicks in once a Child Benefit recipient or their partner has individual income of more than £50,000.

The tax is then applied at a taper rate, until individual income reaches £60,000, at which point all of the Child Benefit would be lost through the tax.

It’s possible to use the Child Benefit tax calculator on the government website in order to see if a person would have to pay tax.

Should a person and their partner both have income which is more than £50,000, then it is the higher earning individual who is responsible for paying the charge.

Some may opt to waive Child Benefit due to the HICBC.

However, HM Revenue and Customs (HMRC) warns members of the public considering doing this to still fill in the claim form.

“If you choose not to get Child Benefit payments, you should still fill in and send off the claim form,” the Gov.uk guidance states.

This is because by claiming Child Benefit, or waiving it but filling out one particular aspect of the form, a person can get National Insurance credits which count towards the state pension.

Furthermore, it’s important to think about who makes the claim, as it’s the person who makes the claim who can get the National Insurance credits.

“Only one person can get Child Benefit for a child, so you need to decide whether it’s better for you or the other parent to claim,” the government website states.

“The person who claims will get National Insurance credits towards their state pension if they are not working or earn less than £166 per week.”

How much is Child Benefit?

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