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Apr
22nd

CHILD BENEFIT By: Clare

The changes to child benefit have been well publicised in the press. They will take effect from 7 January 2013. As the benefit is being withdrawn as an income tax charge in households where there is an income of over £50,000 a year this will have an impact on the tax returns that are due to be filed before the end of next January.
Where an income is between £50,000 and £60,000 the charge will apply gradually and where there is an income of over £60,000 they will no longer gain from child benefit. The partner with the higher income will be liable for the charge and this will have to be reported in the self assessment tax return. Alternatively the claimant can choose not to receive the benefit and then the tax charge will not apply.
These changes mean that households that breach the child benefit threshold will pay much higher marginal rates of tax depending on the number of children they have claimed for in the past. There may be scope for tax planning depending on your circumstances.
For further information please contact Haxton Chartered Accounts.

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