Child Benefit is often viewed as a form of valuable financial support to those raising a family. The cost of living can often prove high, and therefore any financial assistance is often welcomed. At present, HMRC, who oversee the benefit, have split it into two separate rates, depending on which child is being claimed for.
The government website states: “The charge is equal to one percent of a family’s Child Benefit for every extra £100 of income that is over £50,000 each year.
“The amount to pay depends on an individual’s ‘adjusted net income’, and the amount of Child Benefit the claimant is entitled to.”
This is, until income reaches £60,000, at which claimants will probably face disappointment.
This is because after £60k, all Child Benefit entitlement is lost through tax.
The government states that in the 2017/18 tax year, 293,000 people were recorded as paying the HICBC.
However, it is also worth noting parents and guardians can opt out of receiving Child Benefit altogether.
Because of the tax on higher earners, many choose to waive their payments, to avoid charges.
Indeed, in the same 2017/18 tax year, HMRC recorded 516,000 families as opting out of receiving Child Benefit payments at the August of each year.
Although, if someone is choosing to opt out of receiving the payment, they are still encouraged to fill in the CH2 application form.
This action can help to protect State Pension contributions in the long term, and also provide a child with a National Insurance number when they turn 16.
Those who are required to pay the charge must submit this money on time and accurately to HMRC or face a hefty penalty.