Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 1 March 2021 to Question 155212, on Child Benefit, how his Department will reconcile basic rate taxpayers being affected by the High Income Child Benefit Charge in the upcoming tax year.

The High Income Child Benefit Charge (HICBC) is a tax charge which applies to anyone with an income of over £50,000 who gets Child Benefit, or whose partner gets it. The charge increases gradually for those with incomes between £50,000 and £60,000 and is equal to one per cent of a family’s Child Benefit for every extra £100 of income that is over £50,000 each year. Where income exceeds £60,000, the tax charge is equal to the amount payable in Child Benefit.

In order to ensure that people pay the correct tax charge, HM Revenue and Customs (HMRC) need to know both the amount of Child Benefit received and the total taxable income. A Self-Assessment tax return is the only means of establishing this, and avoids using estimates of income which could result in too little, or too much, tax being paid.

HMRC have taken considerable steps to raise awareness of HICBC. They use a wide array of channels to reach those who may be liable to pay HICBC and there is a prominent message about HICBC on the Child Benefit claim form.

In addition, where HMRC hold all the relevant information, they write to parents who may have become liable for HICBC, explaining what they need to do to pay the charge when it is due and avoid penalties.