The HICBC was introduced on 7 January 2013 and applies to couples where:
- One partner has received Child Benefit payments after 7 January 2013, and
- Either partner has income in excess of £50,000 a year. The person with the highest income, if both are over £50,000, will be liable to pay the charge.
It will not apply if the person entitled to receive Child Benefit stops their claim for a complete tax year (or for the period 7 January 2013 to 5 April 2013, for the tax year 2012-13).
In effect, the charge recovers the actual Child Benefit received using a graduated scale. 1% of benefit received will be recovered for every £100 the highest earner’s income exceeds £50,000. Accordingly, if the highest earner’s income exceeds £60,000, all of the Child Benefit received will be clawed back.
The partner with the highest income in excess of £50,000, and where either partner received any Child Benefit payments from 7 January 2013 to 5 April 2013, will need to declare the benefit received on their Self Assessment tax return for 2013.
If you are not registered for Self Assessment you must do so by 5 October 2013.
If you are concerned that you may be caught by the HICBC, and would like assistance with the registration or reporting process, please call.