Child Benefit is a payment made to everyone who has children but there are some restrictions. The primary one of these is that if you earn more than £50,000 a year, you are no longer eligible. If you find you have gone above this annual earning amount or know you will, you need to know how to cancel Child Benefit. Otherwise, you may have to pay back any overpayment made.
Child Benefit basics
If you and your partner each earn less than £50,000 a year, then you will receive the full Child Benefit payment. Claiming Child Benefit can also help protect your state pension if you are staying at home with the child and not working or paying National Insurance. You can contact the Child Benefit office to find out more about this.
Between £50,000 and £60,000
If either of you earns between £50,000 and £60,0000 then you may have to pay a portion of this benefit back in extra Income Tax. This means you receive the full payment each week or month. Then the person with the higher income needs to pay back a portion of this. The process for doing this is through a Self-Assessment tax return. This allows HMRC to calculate how much you need to pay back and to send you a bill for this.
You will need to pay back 1% of the Child Benefit payment for every £100 you earn over £50,000 a year. So if you earn £51,000 a year, this would mean you would have 10 x £100 over the threshold. This means 10% of the Child Benefit would need to be repaid. At the current rate, this would mean an extra tax of just over £107 a year. There are online calculators on the government website to help you work this out.
Over £60,000
If you earn more than £60,000 a year, then you will need to pay back the whole amount of Child Benefit that you receive. Under the current system, you are still paid the amount of money and the person with the highest income will have to pay that amount back as an extra tax. Again, a self-assessment tax return form is needed to confirm how much you will have to pay.
How to cancel Child Benefit
You do have the option to cancel your Child Benefit payment if you are earning more than £60,000 and don't want to go through the process of receiving it and then having to pay it back. This avoids the need to fill in a self-assessment tax return unless you are already self-employed or have to fill one out for your job.
If you are in the middle bracket, it is usually financially better to receive the payment and make the tax payment afterwards. This will mean you keep a proportion of the payment and will be slightly better off.
How to stop the payment
If you decide that you want to cancel Child Benefit entirely, regardless of your income, then you can do this by visiting the HMRC website and completing the form. You can find the form at https://online.hmrc.gov.uk/shortforms/form/CBOptOut .
If you are in the process of paying back Child Benefit due to an overpayment, you cannot cancel the payment until this is complete. And you may still have to pay tax for any payments already received in that tax year.
Even after payments stop, you still have to report any changes in family life that might have impacted the payment should you still be receiving it.
Changes that impact Child Benefit
Whether you claim Child Benefit or not, once you have registered for it, you need to let the department know about any changes. These are a range of things that might impact you receiving the payment.
You can receive the payment until 31 st August on or after the 16 th birthday of your child or if they leave approved training or education. This means you need to tell the Child Benefit team if they stay or leave education or training.
Other examples of notifiable information include:
- Starting paid work for 24 hours or more a week
- Living away from you for 8 weeks at a time or more than 56 days in a 16-week spell
- Going abroad for more than 12 weeks
- Moving to Northern Ireland
- Going into hospital or residential care for more than 12 weeks
- Changes their name, get married, form a civil partnership or lives with a partner
- Starts receiving benefits themselves including Income Support or Universal Credit
How to get in touch with Child Benefit
If you need to report changes, want to ask questions or cancel Child Benefit, you can get in touch with the team at HMRC. Their main contact number is 0300 200 3100 and they offer a textphone service via 0300 200 3103. Lines are open from 8 am until 8 pm weekdays and from 8 am until 4 pm Saturdays. You will need your national insurance number or Child Benefit number when calling.
