High-Income Earners: Don't Miss Out on Child Benefit - Re-Registration Guide by Derbyshire Accountants

High Income Taxpayers with eligible children: If you were impacted by the previous £50,000 high income child benefit charge, it's crucial to opt back into child benefit within three months.

As the tax landscape evolves, it’s crucial for high-income earners to stay informed about changes that could impact their financial well-being. One such change revolves around child benefit entitlements and the high income child benefit charge (HICBC). Here at Derbyshire Accountants, we're committed to helping families navigate these intricacies to optimize their benefits.

On 6th April 2024, the HICBC threshold increased from £50,000 to £60,000. This adjustment opens up opportunities for families, as those with one taxpayer earning up to £80,000 annually can still benefit from child benefit payments, albeit to varying extents.

The charge is structured on a tapered basis, meaning that households where a parent or their partner earns between £60,000 and £80,000 might still find it advantageous to claim child benefit. For every £200 of income exceeding £60,000, there’s a 1% charge on child benefit. If the income surpasses £80,000, the charge equals the entirety of the child benefit payment.

Now, here's where proactive action becomes imperative. High-income earners with eligible children who previously opted out of child benefit due to the former £50,000 threshold must opt back in within three months. The deadline for this crucial step is 5th July 2024.

Child benefit claims can only be backdated for a maximum of three months, making timely action essential.

Additionally, it’s noteworthy that child benefit rates have increased. The benefit for the eldest child now stands at £25.60, while for subsequent children, it rises to £16.95. This adjustment translates to a yearly increase of £83.20 for families with one child and £54.60 for each additional child.

To facilitate the process, HMRC has provided a Restart child benefit payments form, simplifying the re-enrolment procedure:

Click here for HMRC's Restart Child Benefit Form

The recent adjustments to child benefit thresholds present an opportunity for eligible high-income earners to maximise their entitlements. By staying informed and taking timely action, families can ensure they don’t miss out on valuable benefits. At Derbyshire Accountants, we're here to provide guidance and support every step of the way.