Accountants for High Income Child Benefit Charge

High Income Child Benefit Charge Self Assessment Tax Return

Are you affected by the High Income Child Benefit Charge (HICBC) and unsure about managing the tax implications? Taxwise Accountancy is here to help. Our online tax advisers specialize in managing the HICBC through efficient Self Assessment tax return services, helping you navigate this specific charge with ease and accuracy. 

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What is the High Income Child Benefit Charge?

The High Income Child Benefit Charge (HICBC) is a tax charge applied to individuals whose income exceeds certain thresholds and who receive Child Benefit, or whose partner receives it. From the 2024/25 tax year, the HICBC will affect individuals with an income exceeding £60,000, and it will fully offset the benefit if income reaches £80,000.

Only one partner needs to exceed the income threshold for the charge to apply. This charge affects many families and requires those impacted to register for and complete a Self Assessment tax return.

How is the High Income Child Benefit Charge Calculated?

The HICBC calculation is based on the income of the highest earner in a household:

  • Between £60,000 and £80,000 (from 2024/25): The HICBC is calculated at a rate of 1% for every £100 of income above the £60,000 threshold.
  • Above £80,000 (from 2024/25): The charge equates to the full amount of Child Benefit received, effectively reclaiming the benefit through the tax charge.

Calculating the exact HICBC amount and reporting it accurately to HMRC can be complex. This is where our team of expert tax advisers in Luton can make a difference.

Do I Need to File a Self Assessment Tax Return?

If you or your partner’s income exceeds £60,000 and you are receiving Child Benefit, you must file a Self Assessment tax return. Here’s how we can help:

  • Registering for Self Assessment: If you haven’t filed a Self Assessment before, we can assist with the registration process, ensuring you meet all deadlines.
  • Accurate Income Reporting: HICBC is based on adjusted net income, so it’s essential to calculate it correctly. Our tax advisers will help identify deductions and allowances to determine your accurate net income.
  • Deadline Compliance: Missing Self Assessment deadlines can lead to fines. We ensure timely filing, so you avoid penalties.
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Taxwise Accountancy: Expert Help with the High Income Child Benefit Charge

Our Self Assessment services simplify the HICBC process and ensure that your tax return is accurate, compliant, and filed on time. Here’s how Taxwise Accountancy can support you:

  1. Professional HICBC Calculation
    We’ll handle the full calculation of your HICBC, taking into account the new thresholds and ensuring you pay only what’s due.
  2. Self Assessment Preparation and Filing
    Our team prepares and files your Self Assessment tax return, so you can be confident that everything is correct, from income reporting to HICBC inclusion.
  3. Advisory on Income Thresholds and Tax Planning
    If your income is near the threshold, we can provide tax planning advice to reduce your liability where possible, helping you understand your options and minimize tax exposure.
  4. Child Benefit Withdrawal vs. Tax Efficiency
    For some families, opting out of Child Benefit payments might make sense. We’ll help you weigh the benefits and costs, so you can make an informed decision about withdrawing from Child Benefit if needed.
  5. Ongoing Support and Guidance
    We’re here to answer all your questions, address any concerns, and guide you throughout the process. Our ongoing support ensures that you understand every step and remain compliant with HMRC regulations.

Why Choose Taxwise Accountancy for Your HICBC and Self Assessment Needs?

At Taxwise Accountancy, we are dedicated to providing expert help and guidance for your High Income Child Benefit Charge (HICBC) and Self Assessment needs. Here's why you should choose us:

  • Specialized Tax Advisers: Our team of experienced tax advisers specializes in UK tax laws, including the complexities of the HICBC. We have the knowledge and expertise to handle your tax matters with professionalism and accuracy.
  • Transparent and Affordable Pricing: We believe in transparent pricing, ensuring that you know the cost of our services upfront, without any hidden fees or surprises.
  • Accurate and Timely Filing: With Taxwise Accountancy, you can trust that your Self Assessment will be filed accurately and submitted on time. By entrusting us with your tax return, you can avoid penalties and reduce the stress associated with tax compliance.

Frequently Asked Questions about the High Income Child Benefit Charge

  • What are the consequences of not paying the High Income Child Benefit Charge?

    If you fail to pay the High Income Child Benefit Charge, you may face penalties from HMRC. It is important to seek assistance to ensure compliance.

  • How can I reduce my adjusted net income to lower the High Income Child Benefit Charge?

    Our tax advisers can review your income and suggest tax-efficient strategies, such as pension contributions, which could help lower your adjusted net income.

  • Which partner needs to complete a self-assessment tax return?

    The partner with the higher adjusted net income needs to complete a self-assessment tax return and include the Child Benefit received during the year.

  • Can I avoid the High Income Child Benefit Charge by opting out of receiving Child Benefit payments?

    Yes, you can choose to stop receiving Child Benefit payments to avoid the charge. However, even if you opt out, registering for Child Benefit can still protect your National Insurance credits.

  • What if my income fluctuates and occasionally exceeds £60,000?

    If your income fluctuates, the High Income Child Benefit Charge is only applicable for years when it exceeds £60,000. We can assist you in reviewing your income annually to determine your liability.

  • How much does Taxwise Accountancy charge for High Income Child Benefit Charge self-assessment?

    Taxwise Accountancy charges £125+VAT for the preparation and submission of the self-assessment tax return for Child Benefit and employment income.

Get in Touch with Taxwise Accountancy for HICBC Assistance

Dealing with the High Income Child Benefit Charge can be confusing, but you don’t have to handle it alone. Contact Taxwise Accountancy today to schedule a consultation with our expert tax advisers in Luton. We’ll help you manage your HICBC obligations, file your Self Assessment accurately, and answer any questions you may have about the process. 

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