If you are a self-employed individual or a company director with children under the age of 16, you may be eligible for Child Benefits in the 2023/24 tax year, provided your total earnings are below £60,000. Additionally, eligibility can extend to children under 20 who are currently undertaking approved educational courses or training. The good news is that there’s no limit to the number of children you can claim for.
The High Income Child Benefit Charge (HICBC)
If your annual taxable income exceeds £50,000, you may be subject to the High Income Child Benefit Charge (HICBC). The charge amounts to 1% of your income for every £100 that exceeds the £50,000 threshold. For incomes between £50,000 and £60,000, the charge will increase gradually. It’s important to note that the tax charge applies to the higher earner among both partners. However, there are possibilities to reduce the amount you pay if you’ve declared trading losses on your Self-Assessment tax return or if you are eligible for specific tax reliefs.
Child Benefit Rates per Week
For the 2022 to 2023 tax year, the Child Benefit rates per week are as follows:
- Eldest or only child: £21
- Other children: £14.40
For the 2023 to 2024 tax year, the Child Benefit rates per week will be:
- Eldest or only child: £24
- Other children: £15.90
Example Calculations
Here are some estimated calculations to give you an idea of what to expect:
For the tax return for the year ended 5th April 2023
- One Child: £21.80 x 52 = £1,133.60
- Two Children: £21.80 + £14.45 x 52 = £1,885.00
- Three Children: £21.80 + (2x £14.45) x 52 = £2,636.40
- Four Children: £21.80 + (3x £14.45) x 52 = £3,387.80
- Five Children: £21.80 + (4x £14.45) x 52 = £4,139.20
For the tax return for the year ended 5th April 2024
- One Child: £24.00 x 52 = £1,248
- Two Children: £24.00 + £15.90 x 52 = £2,074.80
- Three Children: £24.00 + (2x £15.90) x 52 = £2,901.60
- Four Children: £24.00 + (3x £15.90) x 52 = £3,728.40
- Five Children: £24.00 + (4x £15.90) x 52 = £4,555.20
Navigating tax rates and Child Benefit can be complex, but our team of accounting specialists is here to provide expert guidance and support. We recommend consulting with us to ensure you make informed decisions that align with your financial goals.
