This rule has caught a lot of parents out… and it is a costly mistake to make.
If either you or your partner earns more than £50,000 a year before tax, you will have to pay some or all of your Child Benefit back via your income tax each month!
If you earn £50,000 or more as a household, you are exempt, but if an individual earner earns £50,000 or more, your household will fall under this rule even if the second earner earns as much as £49,999, which has caused a huge outcry amongst affected families.
We can’t imagine how stressful this must be, especially if you didn’t know and have earned above the threshold for years as some parents have, resulting in bills of thousands of pounds.
A lot of families are also caught out by being promoted at work and given a pay rise but being unaware of the rules, or perks of their job that are classed as their income by HMRC, such as a company car. You need to ask your employer about your ‘P11D form’ which will be be sent to HMRC each year by your employer, outlining what expenses and benefits you also get on top of your salary.
How do I ensure I am paying the right tax in this situation?
You need to register for ‘self assessment’ here so that HMRC can calculate how much extra tax you owe.
Have you been affected by this? Let us know in the comments!
Love from Katie & Team BBY. XX