HMRC issues new warning to people earning £60,000 or more | Personal Finance | Finance

HM Revenue & Customs is warning people who earn £60,000 or more that they may need to pay back a benefit. Parents who earn over that amount have been urged by HMRC to check if they have to pay back the High Income Child Benefit Charge.

A parent or their partner may have to pay the charge if either of them receives Child Benefit and at least one earns more than the threshold. This means they have to pay back some or all of their Child Benefit. A single income is over the threshold if it exceeds £60,000 for the tax years beginning 2024 to 2025 or if it is more than £50,000 for tax years up to and including 2023 to 2024.

The charge could also apply if someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the youngster’s upkeep. It doesn’t matter if the child they live with is theirs or not.

HMRC said in a post on social media: “Earning over £60k? Check if you need to pay the High Income Child Benefit Charge.”

It can be paid through your salary or via Self Assessment. To determine whether your income is over the threshold, you would need to calculate your adjusted net income, according to the Government.

This is your total, taxable income, including money derived from savings, interest and dividends. It should be worked out before any Personal Allowances and minus tax reliefs, such as Gift Aid and pension contributions.

There is a Child Benefit tax calculator online which can help you to estimate how much money you get in Child Benefit in a single tax year and the High Income Child Benefit tax charge you or your partner might need to pay.

From the tax year 2024-25 onwards if you or your partner earn £80,000 or more, you have to pay all of it back.

You pay back 1% of Child Benefit for every £200 you earn over the threshold so for example an adjusted net income of £65,500 is £5,500 over the threshold.

Dividing that amount by 200 equals 27.5, which means you would pay back 27.5% of your Child Benefit.

If yours and your partner’s combined adjusted net income exceeds the threshold, then whichever of you has the higher income is responsible for paying the tax charge.

You can also opt out of Child Benefit payments. Although you will still be registered for it, you won’t receive it.