From food and warm clothes to childcare, bringing up children can be pricey. The average cost of raising a child (excluding housing and childcare) from birth to the age of 18 is £75,436 for a couple and £102,627 for a single parent, according to the Child Poverty Action Group (CPAG).
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A particular form of financial support for parents and guardians out there is Child Benefit.
People can get Child Benefit if they’re responsible for bringing up a child who is under 16, or under 20 if they stay in approved education or training.
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However, it’s important to be aware that only one person can get Child Benefit for a child.
There are two Child Benefit rates, and how much the claimant gets depends on who the allowance is for.
For example, if it’s for an eldest or only child, the weekly rate is £21.05.
Then, for any additional children, the rate is £13.95 per child, per week.
However, some people may lose some or all of their payment, and this is if they have an income which is over a threshold of £50,000.
Gov.uk says: “You may have to pay back some of your Child Benefit in tax if your (or your partner’s) individual income is over £50,000.”
The money is then reduced under what’s known by the High Income Child Benefit Charge (HICBC).
“You can get Child Benefit if your (or your partner’s) individual income is over £50,000, but you may be taxed on the benefit,” Gov.uk states.
It may be that some people are in a couple in which both partners have an income of more than £50,000.
The government website says: “If your partner’s income is also over £50,000 but yours is higher, you’re responsible for paying the tax charge.
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“You need to fill in a Self Assessment tax return each tax year and pay what you owe.”
It’s possible to use the Child Benefit tax calculator online in order to estimate how much tax may have to be paid.
Once a person is earning £60,000, then they will lose all of the benefit through the tax.
Chartered financial planner and Director of Public Policy at LEBC Group Kay Ingram has pointed out a significant date to be aware of, should a person be liable to pay the tax.
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Speaking to Express.co.uk, Ms Ingram said: “If this is the first time you have been liable for child benefit tax and do not ordinarily file a self-assessment return, you should register with HMRC by 5 October in the tax year following the start of the liability.
“So new parents and those whose income exceeds £50,099 for the first time should register by 5 October 2020 for the current tax year.
“This may mean that your tax liability can be collected via your tax code which is easier for those with steady income, which does not change year on year.”
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