HM Revenue and Customs (HMRC) has issued a warning to parents across the country who may be missing out on financial benefits. The tax authority highlighted that individuals earning less than £80,000 could gain significantly from Child Benefit.
HMRC emphasized that the threshold for the High Income Child Benefit Charge has been raised to £60,000, enabling more parents to receive Child Benefit without facing payment penalties.
In an official statement, HMRC emphasized, “Attention parents! If your income is below £80,000, you might be missing out on money. The income threshold before the High Income Child Benefit Charge kicks in has been increased to £60,000.”
Child Benefit is open to parents with children under 16 years old, or up to 20 if they are still in education or training. There is no restriction on the number of children eligible for the benefit. Families receive £25.60 weekly for the first child and an additional £16.96 per week for each subsequent child.
This equates to an annual sum of £1,331.20 for one child and £2,212.60 for two children. Recent data from HM Revenue and Customs indicates that six million families in the UK receive Child Benefit payments.
Furthermore, Child Benefit provides National Insurance Credits, potentially enhancing parents’ State Pension entitlements. Typically, a minimum of 10 years of credits is required for State Pension qualification, with a full State Pension necessitating 35 years of contributions.
This benefit is particularly advantageous for parents not employed or not receiving National Insurance credits through their employer.
However, high-income earners may face challenges with Child Benefit due to the high-income charge. If a parent or their partner’s income exceeds £60,000 annually, they may incur an additional charge on their benefit.
This charge continues until an individual’s income surpasses £80,000, at which point the entire benefit amount must be repaid. This renders the benefit ineffective unless needed for National Insurance credits during unemployment.
Child Benefit claims can be made 48 hours after a child’s birth registration or when the child moves in with the claimant. Claims can also be backdated up to three months.
It is important to note that only one person can receive Child Benefit for a child. In cases where both parents are involved, an agreement is required on who will claim the benefit. The claimant will also receive National Insurance credits, which may influence the decision.
To apply for Child Benefit, the process can be completed online at GOV.UK, where a form is available for submission. In certain instances, the completed form may need to be printed and sent to HMRC along with supporting documents.