Child benefit full claim registration deadline

The revisions to the high-income child benefit charge present an opportunity for certain couples to reduce their tax burden. However, for others to capitalize on these changes, proactive steps are necessary. What specific actions are needed and when should they be taken? Let’s delve into the details.

Recap: High-income child benefit charge (HICBC)  

A recap on HICBC: The high-income child benefit charge (HICBC) has been a subject of debate since its inception in 2013. It pertains to individuals or their partners who receive child benefit and have incomes above a certain threshold. Prior to April 2024, a couple with a single income surpassing £50,000 per annum incurred the HICBC, while a couple with a combined income exceeding £50,000 per annum did not, leading to perceived inequity in its application.

First budget change:

In the inaugural Budget adjustment, the 2024 Spring Budget addressed this disparity. The Chancellor unveiled plans for HMRC to undertake consultations on amendments that consider household income rather than solely focusing on the highest earner’s income. Although a definitive implementation date has yet to be set, it is anticipated that these changes will come into effect no later than 6 April 2025. Meanwhile, for the fiscal year 2024/25, a temporary alleviation of the HICBC has been implemented.

Second budget change:

In the fiscal year 2024/25, adjustments to the HICBC have been made, with the threshold raised to £60,000 and a reduced clawback rate of 1% for each £200 of income exceeding the threshold, halving the previous rate. Consequently, couples with the highest earner’s income below £80,000 will retain a portion of their child benefit, mitigating the impact of the HICBC.

Opted out:

Numerous individuals and couples eligible for child benefit chose to forgo claiming it due to the prospect of the entire amount being reclaimed through the HICBC. However, with the adjustments to the income threshold and rate, many will find it advantageous to now avail themselves of child benefit.

Tip:

Child benefit is not allocated automatically; it requires a formal claim. If you have refrained from registering for the benefit due to concerns regarding the HICBC, it’s advisable to reassess whether claiming it would now be financially advantageous. To ensure full entitlement for the fiscal year 2024/25, it is imperative to submit a claim no later than 5 July 2024.