Taxpayers with eligible children should pro-actively register for child benefit

Robert Salter, Global Mobility Director  said:

This is particularly relevant for those families who ceased to claim the child benefit in previous tax years because of the child benefit clawback, which historically started when one partner earned at least £50,000 per annum. For many taxpayers, the decision is automatic. For example, if they (and their partner or spouse) each has always been earning under £50,000 per annum, they should have always been claiming child benefit for their eligible children, and these claims would continue to be valid.

However, the Child Benefit Clawback – whereby the value of the child benefit is clawed back via additional taxes – typically meant that those families with one taxpayer earning above £60,000 per annum – received no net income from claiming child benefit. It is these families who typically ‘opted out’ of receiving child benefit and who should now re-consider whether they elect to claim the payments again.

Whilst the child benefit clawback system remains, the rules were eased in March’s budget, and this means that from the 6th April 2024, families with one taxpayer earning up to £80,000 per annum can still actually benefit – to some degree – from Child Benefit payments. As such, those families who previously chose not to receive the child benefit but who have the highest earning taxpayer earning no more than £80,000 per annum should now pro-actively register for child benefit from 6th April 2024. Otherwise, they could risk losing their child benefit entitlement.

Although many families – particularly those with irregular earnings due to overtime or bonus payments or who are perhaps self-employed – may not know whether one partner / spouse will earn over the £80,000 threshold in a tax year, might be inclined to ‘wait & see’ before they claim the child benefit, the reality is that child benefit claims can only be backdated for a period of 3 months. As such, a ‘wait & see’ approach could literally mean you cannot claim the benefits to which you would otherwise have been entitled!

Would you like to know more?

If you have any questions about the above or would like to discuss your specific circumstance, please get in touch with your usual Blick Rothenberg contact or Robert Salter using the form below.