Child Benefit and the High Income Child Benefit Charge

17 October 2019

The Office of Tax Simplification has published suggestions surrounding how to make elements of the High Income Child Benefit Charge (HICBC) more transparent to those that it affects and to make them aware of the benefits of claiming Child Benefit even if they do not receive the associated payments. The document published on 10 October 2019 stated that the link between Child Benefit and maintaining National Insurance contributions needs to be more widely publicised and explained as a number of people are missing out on this.


If an individual or their partner earns in surplus of £50,000 per year, a tapered tax charge applies to the child benefit and once the earnings exceed £60,000, the charge is equivalent to the monetary amount of that benefit. At this point, many decide that it is not advantageous to claim the benefit as they are not well informed about the implications this may have on their National Insurance records. The additional positive aspect to claiming but not receiving payments relating to Child Benefit arises from the fact that it is the main method by which children are allocated with a National Insurance number upon turning 16.


The document comments on the administrative burden that could potentially be placed on the Department of Work and Pensions (DWP) if there is a surge in the number of individuals requiring a NI number whose parent(s) were not claiming Child Benefit. It also seeks to find resolutions for backdating NI contributions for any who were not aware of the effect of not claiming the benefit on their National Insurance record.




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