Published On: Fri, Apr 17th, 2020

Child Benefit tax calculator: How does this tool work and can it help with tax bills? | Personal Finance | Finance


Child Benefit claimants may have to pay a tax charge known as the high income child benefit charge. This will affect people who have an income over £50,000.

Deductions can come from pension contributions deducted from pay or not paid from a salary, retirement annuity contracts, cycle schemes or gift aid donations.

Once all of this information has been included, the total amount of child benefit the user should have received for the selected tax year will be displayed.

The tax charge, if there is one to pay, will be underneath this figure.

If claimants earn between £50,000 and £60,000 they will need to pay back one percent for their familiy’s Child Benefit for every extra £100 they earn over £50,000 in a year.

So, for example, if a claimant earns £51,000 their income is £1,000 over the limit.

This will mean the extra tax is 10 percent of their child benefit of £21.05 per week.

The amount of tax due could be even higher for people earning more than £60,000 a year.

If a person earns more than £60,000 they will need to repay back all of the Child Benefit as income tax.

This will need to be done through a self-assessment tax return.

Despite the cost to higher earners, the government encourage all eligible people to claim for Child Benefit, even if they don’t need the income.

Claiming Child Benefit will being additional perks. By claiming, people will not miss out on:

  • National insurance credits which protect entitlement to state pension
  • Their child automatically being issued with a NI number before reaching 16
  • Other benefits such as Guardian’s Allowance.

It should be noted that Child Benefit can be claimed without the payments being issued.

A claimant can also choose to stop receiving Child Benefit at any point.



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