HMRC Warns Parents on Child Benefit Income Threshold

HM Revenue and Customs has issued a warning to parents claiming Child Benefit, cautioning that recent pay rises could push their income above a £60,000 threshold and trigger repayment of the benefit through a tax charge. The alert, shared on social media on April 19, targets families in the UK who may unknowingly exceed the limit for the 2024-25 tax year, potentially leading to unexpected financial obligations.

The High Income Child Benefit Charge applies if either the claimant or their partner earns more than £60,000 in adjusted net income, which includes taxable earnings, savings interest, and dividends before certain reliefs like pension contributions. Officials calculate the repayment at a rate of 1 percent of the total Child Benefit received for every £200 earned over the threshold. For instance, an income of £67,600 would require repaying 38 percent of the benefit, as £7,600 above the limit divided by £200 equals 38. If the higher earner reaches £80,000 or more, the full amount must be repaid. The charge is the responsibility of the individual with the highest income, even if they do not claim the benefit themselves.

Child Benefit provides tax-free support to parents or...