Child Benefit for people earning £50,000+

You and your partner each earn less than £50,000 a year

If you and your partner each earn less than £50,000 a year, you’ll receive the full amount of Child Benefit without having to pay any of it back. 

Either you or your partner earns between £50,000 and £60,000 a year

If either you or your partner earns between £50,000 and £60,000 a year before tax, you’ll have to pay a portion of your Child Benefit back in extra Income Tax.

How does it work

You’ll still get paid the full amount of Child Benefit each month – or each week, if you’re paid weekly.

But whichever one of you has the higher income will have to pay more Income Tax to repay the portion of Child Benefit you no longer qualify for.

You’ll need to fill in a Self Assessment tax return so HMRC can calculate the amount of extra Income Tax you’ll have to pay.

How much do you have to pay back?

You'll have to pay back 1% of your family’s Child Benefit for every extra £100 you earn over £50,000 each year.

Example

Katya and Leroy have a baby. Katya is staying at home to look after the baby. Leroy earns £51,000 a year.

Because Leroy earns more than £50,000, he has to pay extra tax to repay some of their Child Benefit.

His income is £1,000 (10 x £100) over the limit, so the extra tax is 10% of their Child Benefit of £20.70 a week. So, he pays extra tax of £107.64 a year (£2.07 x 52).

Either you or your partner earns more than £60,000 per year

If either you or your partner has an income of more than £60,000 a year before tax, you'll have to repay all your Child Benefit as Income Tax.

How does it work

You’ll still get paid the full amount of Child Benefit each month – or each week, if you’re paid weekly.

But whichever one of you has the higher income will have to pay back the full amount in the form of Income Tax.

You’ll need to fill in a Self-Assessment tax return so HMRC can calculate the extra Income Tax you’ll have to pay.

What you need to do if you’re a new parent

By making sure you still put in your claim for Child Benefit – even if you’re earning over £50,000 a year, and you’ve decided not to take the payments — you make sure you don’t miss out on:

  • National Insurance credits to protect your entitlement to State Pension
  • your child being automatically issued with a National Insurance number before their 16th birthday
  • other benefits – for example, Guardian’s Allowance.

If you want your Child Benefit payments to stop

You can choose not to stop receiving Child Benefit payments.

  • This avoids the hassle of paying extra tax.
  • You won’t have to complete a tax return.
  • If your annual income is between £50,000 and £60,000, you’ll end up out of pocket as you’ll be giving up the proportion of Child Benefit you still qualify for.

How can you stop your payments

You should let HMRC know you want to stop your payments.

If you want to continue getting your Child Benefit

If you decide to continue getting your payments, you’ll need to register for Self Assessment.

You can choose to keep your Child Benefit payments.

  • If your income is between £50,000 and £60,000, you’ll still get however much you qualify for.
  • Even if you’re earning over £60,000, if you put your Child Benefit aside in a savings account, you can earn interest on the money before you have to pay your tax bill.
  • You’ll need to pay the extra tax.
  • You’ll have to complete a tax return.

How to choose a savings account

Comparison websites are a good starting point if you’re trying to find a savings account to suit your needs.

Popular websites for comparing savings accounts include:

Remember:

  • Comparison websites won’t all give you the same results – so make sure you use more than one site before deciding. You want to get the highest interest rate you can find
  • It’s also important to research the type of product and features you need before choosing, or changing, supplier.
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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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