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High earners reminded of child benefit opt-out deadline

Individuals who earn more than £60,000 a year are being reminded to opt out of receiving child benefit before 28 March, if they wish to avoid filling in a tax return and repaying the benefit for the 2013/14 tax year.

Following recent changes to the child benefit regime, the benefit is gradually clawed back for those individuals whose income is between £50,000 and £60,000 a year, by means of the new High Income Child Benefit Charge. For those earning more than £60,000, the charge is 100% of the amount of child benefit.

Individuals who are affected by the charge have the option either to stop receiving the payments, or to pay back some or all of the benefit they receive through the self assessment system.

If child benefit payments are stopped from the end of March 2013, no payments will be made for the tax year 2013/14, and taxpayers will only need to complete one self assessment tax return, covering the payments made from 7 January to 5 April 2013 (unless they need to complete a return for other reasons).

Lin Homer of HM Revenue & Customs said, ‘Anyone with an income over £60,000 who has received child benefit since January needs to register for self assessment by 5 October 2013 to repay some or all of this year’s benefit, but if they opt out now this will be a one-off’.

We can help with your tax planning needs. Please contact us for further assistance.