Planning For Child Benefit Cut

As you may be aware, child benefit is going to be cut for some people from January 2013.  Although it may seem a long way off, now is the time to plan for this as we may be able to find ways to reduce the impact for you.

As the plans stand, if neither parent earns over £50k then they will continue to receive child benefit as before.  Earnings include salary, rental income and savings interest. 

 If, however, either parent earns between £50k and £60k then they will only be entitled to receive a reduced payment which will drop to zero if one or both parents earn over £60k.  What will happen in practice is that you will still receive the full amount, but you will need to fill in a self assessment and you will be asked to pay more tax to effectively cancel out the overpayment.  HMRC estimate that there will be about 1.2 million families affected and of these 500,000 will have to fill in a self assessment that didn’t have to before.

If you think you will lose out on child benefit in January or are worried about filling in a self assessment form then give us a call.  We have some great ideas that may help some of you to maintain your current levels of payments!

Act now before it’s too late!