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Child’s play

11 September 2012 / Mark Morton
Issue: 4370 / Categories: Comment & Analysis , Income Tax
MARK MORTON explains the essentials of the new charge on child benefit for higher earners

KEY POINTS

  • Income threshold for the new charge.
  • Calculating adjusted net income.
  • The charge can be collected through PAYE.
  • HMRC will contact individuals affected.

There have been several articles in Taxation highlighting the problems caused by Finance Act 2012 Sch 1 the high-income child benefit charge: for example Slow-motion car crash by Mike Truman and Andrew Hubbard’s Personal matter.

Both of these expressed the hope that the proposals would be withdrawn or at the very least significantly altered before the Finance Act was passed.

Unfortunately that did not happen. While it is impossible to comment on these new rules without pointing out some of the problems they create this article concentrates on trying to explain the implications for advisers and their clients.

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