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What is HICBC ?
The High Income Child Benefit Tax Charge (HICBC} was introduced by HMRC in January 2020, and it’s a special tax charge which applies to anybody with an annual income over a certain level (£50K). It applies if you are the main wage earner, spouse or joint-heirs, or child, and it can also apply if one of you are self-employed. The charge is collected under Self Assessment.
If you or your spouse / partner earns over £50K annually then you may have to give portion of child benefit back to HMRC as an additional tax. Also known as HICBC High Income Child Benefit Charge. The current charge is 1% of every £100 earned over the prescribed limited of £50K per annum. In a single year with one child the current child benefit rate is upto £1076.40 or up to £1788.80 for two children.
What is HICB and What is its Importance for You?
The HICB (High Income Child Benefit) is one of the major benefits being offered by the British government to its citizens, but it’s not the only one. You can get Child Benefit, Carer Allowance, Income Support and so many other benefits too. You can check how to apply for any of these benefits to find out how to apply for the HICB too. However, before doing that, you should take a look at some of the basic facts about the HICB and how to apply for it properly first.
Firstly, when you apply for the High Income Child Benefit, you’ll be asked if you want to have two payments, one for yourself and one for your child. You can also choose to have a single payment, but that might cause your child to miss out if he or she’s receiving other benefits. Click here to calculate your HICB.
Can We Avoid HICBC Even if We are High Incomer Earner ?
This is a question that many people are wondering about. There are many people who will be surprised to know that it is possible for them to take advantage of the Child Tax Credit in order to avoid paying tax on child benefit. With this kind of option you can easily get the money that you need for your financial needs from the Government. In order to find out more about how high earners can avoid a tax penalty on child benefit in the UK, you can simply log onto the official website of the UK Government.
The best thing about it is that it is totally free and it cannot be claimed back after you have started working again. All that you have to do is to claim it on time and if you miss one single payment then this will not have any adverse effect on your credit rating. This is one kind of benefit that you cannot miss out when you are working hard to save for your children.
How can We Help You ?
HICBC is one of the specializations of Total Tax Accountants. We have a team of professionals who can help you in any of your concerns for HICBC. This charge may not be applicable to you and you may not even know this.
Even if it does, there are legal and legitimate ways you can avoid it. All you have to do is to contact us. You can also fill up our online form and let us know your concerns, and we will get back to you either with a plan or a request to give us further information, if we need more clarifications. However at the end of the day, you are likely to be free of your worries.
Its easier than you think !
Is it worth claiming HICB ?
Many people ask this question and it’s not a straight simple Yes or No answer. It all depends on individual circumstances. If both parents are in excess of £60K income and there is not much can be done to reduce their income then yes may not be worth claiming for Child benefit at first place. However if one parent is continuously at home looking after the child then they should claim Child benefit for children up to the age of 12 as this will protect their state pension entitlement by receive national insurance tax credits. Sounds complicated ? No problem, we can help you .