message to display in fancybox
Read more Home page

Join us on

MMM Blog Join us on Twitter Join us on Facebook Join us on YouTube
Click here

TOTS100 - UK Parent Blogs


Click here

Child Benefit

Last updated: 19 January 2016

From 7 January 2013 for parents that earn over £50,000, you will not be entitled to all of the child benefit and will have to pay a tax charge each year.

Child benefit is paid for each child up to age 16, or age 20 and in full time education.

You’ll get £20.70 per week for your first child and then £13.70 a week for any further children.

Click on HM Revenue & Customs (HMRC) site here to make an application. If you are a high earner (earn over £60,000), you can opt out, as you are not entitled to it.

New rules from January 2013

From 7 January 2013 not all families will be able to claim for child benefit.

For those earning more than £50,000 and already getting child benefit, then although it will not stop, you will be subject to what HMRC are calling the high income child benefit charge – this means you will have to pay additional tax to make up for the benefit. The tax will have to be paid using self-assessment.

If you have never filled in a self-assessment form before, you may have to now if you are in the higher income bracket.

It is estimated that 500,000 more people will be subject to self-assessment – good news for accountants but bad news for parents.

The rules are not simple, by any means – but the points below will help answer some questions:

  • You can get the full allowance as long as you or your partner do not earn over £50,000 a year
  • If either you or your partner earn over £50,000 a year, then you will still get the benefit, but a reduced amount. This reduction is reflected in the highest earner having to pay an additional 1% tax on every £100 earned over £50,000. So, if you or your partner earn £52,000 a year, then the £2,000 will be subject to the additional tax
  • This tax will be paid via a self-assessment tax return at the end of the tax year
  • Combined or household income is not taken into account – as an example, if Mr Smith earns £52,000 and Mrs Smith earns £10,000 a year – then the child benefit will be reduced. However, should Mr Smith be on £45,000 a year and Mrs Smith on £40,000 a year – then the child benefit is not affected, even though scenario two means the family has more income
  • If either parent earns over £60,000, then you get no child benefit at all
  • HMRC has sent out letters to families that maybe affected
  • If you fall under the higher income bracket of between £50,000 to £60,000, then it is possible to stop to payments, but it is worth knowing that the tax charge will be lower than the actual child benefit, so you may not want to stop payments
  • If you or your partner earn more than £60,000, then the tax charge will be the same as the child benefit, so in this case, you may want to stop payment. You can do this on the HMRC site here
  • If you are not already making use of a salary sacrifice schemes, such as childcare vouchers, then it may be worth considering as it could reduce your income below the threshold which could see you keep your child benefit as it is.

Useful links

You can visit the HMRC site here for more information on the changes and find some useful links

Do you still have old £5 notes?

Old £5 notes will no longer be a legal tender after 5 May 2017 – so, if you have any, use them or bank them. Mums and dads – raid your children’s piggy boxes and bank...

Read more...

Virgin Money launches Manchester Uni...

If your child is a Manchester United fan, then they’ll certainly be attracted to Virgin Money’s new savings account for children. In a partnership with Manchester United, Vi...

Read more...

Teens cost parents more than the ave...

Raising a teenager costs a whopping £28,767 – more than the average UK salary. A report by Aviva – The Cost of Youth – found the bill for teenagers (age 13 – 19) topped...

Read more...

Reduce your grocery bill by 70% this summer!

The kids are off school and they are going to be hungry – inevitably, the next few weeks will see the cost of your weekly shop shoot up.

To help families keep the costs of food shopping down, MMM put Approved Food to the test, which can help slash the cost of shopping by as much as 70%.

There is of course one catch – the food is past or close to its sell-by date, but perfectly safe.

With a £30 budget, MMM managed to bag a fair amount – cereals, tinned food, sweets and treats, drinks and even laundry detergent and dishwasher tablets – the sort of things where you can generally ignore the date stamped on the product.

If you’ve tried reducing the cost of the grub by switching brands or shopping at discount stores but think you can do better, then try Approved Food  – you’ll be surprised at just how much you could save on some store cupboard essentials.

New products are available everyday and there are some real bargains. For example, Sprite Zero 330ml for just 29p or a 2kg Reeses Peanut jar for just £2.99. There’s even stuff for pets, at more than 50% off.

MMM was really pleased with service and surprised at just how at just how much £30 would buy (see pic above/ instagram).

Although we would like to see Approved Food cut down on the cardboard packaging, the items arrived well packed and in excellent condition.

So, if you’re looking to save a few more pounds on your groceries, take a look at Approved food – you’ll be surprised at just how good the bargains are.

 

Keep up with MMM on Twitter @MumMoneyMatters and Facebook !

 

Having a Baby

Pensions

Savings

Work & Benefits

Life & Benefits

Childcare/Schooling

Shopping

Holidays