Child Benefit Charge
We set out below the main points of the charge and illustrate some of the practical issues.
Does this affect my family?
Changes in circumstances
Conversely, if a couple come together and Child Benefit is already being paid, the partner with the highest income will only be liable to the charge for those weeks from the date the couple start living together until the end of the tax year.
Who is a partner for the purpose of the charge?
A person is a partner of another person at any time if any of the following conditions are met at that time. The persons are either:
- a man and a woman who are married to each other and not separated or
- a man and a woman who are not married to each other but are living together as husband and wife.
Similar rules apply to same sex couples.
How will the administration operate?
In the self assessment system individuals are required to notify HMRC if they have a liability to income tax, capital gains tax and the High Income Child Benefit Charge by 5 October following the tax year. This requirement is amended to include situations where the person is liable to the Child Benefit charge.
In addition, the charge is included in PAYE regulations so that it can be collected through PAYE, using a reduced tax code. It is also included in the definition of tax liability, so that it could potentially affect payments on account and balancing payments.
But I don’t receive a tax return?
It may well be that you and/or your partner have not received a tax return before but this may need to change. Remember you need to tell HMRC by 6 October 2018 if you think a charge may be due for 2017/18.