Child benefit rule that means you may have to pay it all back

Parents are warned that they may have to repay part or even all of their child benefits if they earn too much.

The Money advice service says parents and guardians must repay one percent of the child benefits they receive for every additional £ 100 they earn over £ 50,000, the Express reports.

The system is known as the High Income Child Benefit Tax Charge (HICBC) and applies to families across the country.

People who earn between £ 50,000 and £ 60,000 are taxed on an individual basis to repay the money to which they are not entitled.

The Money Advisory Service says, “If you or your partner has an income of more than £ 50,000 a year before tax, then you must repay some (or all) of your child support in the form of additional income tax.”

The tax works on a sliding scale for every £ 100 in income between £ 50,000 and £ 60,000.

In fact, those who earn more than £ 60,000 do not receive child support.

Child benefits can be claimed by Britons responsible for raising a child, either under 16 or under 20 if they continue to receive approved education or training.

Only one person can receive the child benefit, although there is no limit to the number of children that can be claimed.

In two-parent families, however, both incomes are revised.

As a result, some families may face higher income taxes.

The way it works is that once income has risen above £ 50,000 per year, families will have to repay some portion of the child benefits in additional income tax.

This should usually be done with a tax form for self-assessment that must be completed and sent to HMRC.

Anyone who has trouble calculating their tax burden can visit the government website and use the tax calculator.

For those who earn over £ 60,000 and have to pay it back, this is done again through a self-assessment tax return so that the additional income tax can be calculated by HMRC.

While a high income tax bill can deter high-income parents and guardians from filing child support at all, there are certain things worth keeping in mind.

That’s because if people fill out the appropriate child support form, but choose to forgo payments they would otherwise receive, it is valuable National insurance credits can be received in certain circumstances.

The government website explains, “The person claiming will get national insurance credits towards their state pension if they are not working or earn less than £ 166 a week.”

Therefore, if one parent earns above the threshold, but another works or has a part-time job that pays less than the prescribed amount, it is therefore a good idea to file a claim.

Read more about the tax on child benefit for high income the government website here.