Parents across the UK will be receiving letters from HMRC this week about losing child benefits. If one parent earns over £50,000 child benefits they receive will be reduced or stopped.
Some 500,000 people are set to receive these letters and accountants are getting ready for a flood of calls from confused parents and those wanting advice. The 500,000 parents due to receive the news will be asked to complete self-assessment tax forms.
The cuts will come into effect in January 2013. Currently, child benefits are £20.30 a week for the first child and £13.40 for each child born after that. Any parents earning between £50,000 and £60,000 will have their child benefits reduced on a sliding scale. This equates to a potential additional ‘tax’ of 17.5% on earnings between £50,000 and £60,000 for a 2 child household.
However, concerns have been raised that if two parents in a household earn just under £50,000 each they will still receive their child benefits, whilst if there is one parent earning over £60,000 they will lose all of their benefits.
Many people on straightforward salaries will be unable to mitigate this but if have your own business we may be able to help.
If you have received a letter from HMRC concerning child benefit cuts, and you need advice or assistance, call Alexander & Co today on 0161 832 4841. Alternatively, please complete our simple online enquiry form or email firstname.lastname@example.org