Trying to figure out just how much the Child Benefit changes will cost you? You can work it out on paper following the instructions in this article. Or else you can simply try our new Child Benefit Loss Claculator below.
You will need to have your annual Adjusted Net Income figure, that is your total income (including interest on shares, savings, etc) less any allowble deductions such as pension contributions, childcare vouchers, gift aid contributions, etc. If your annual Adjusted Net Income is under £50,000, then your Child Benefit payments will not be affected. Once over £50,000, you will lose 1% of your Child Benefit for every £100 of income over £50,000, so that if you reach £60,000 in net earnings, you wll have lost 100% of your Child Benefit.
If you want to do it on paper yourself, do the following: to work out what percent of your Child Benefit payments you will lose, take £50,000 away from your Adjusted Net Income figure. Divide what is left by 100 and you will get the percentage figure. Say you earn £55,000 after deductions. Take away £50,000 and you are left with £5,000. Divide £5,000 by 100 and you get 50, telling you that you will lose 50% of your Child Benefit payments.
For tips on how to reduce the amount of Child Benefit you will lose, see our previous article.
If you are losing all of your Child Benefit and you decide you want to stop payments altogether to avoid having to make a Self Assessment Return, read our article on the stopping child benefit payments.
Note, you should register for Child Benefit for every child you have, regardless of whether you choose to receive payments or not. Being registered has important National Insurance benefits. Once registered, stay-at-home parents still receive their National Insurance credits. If you decide not to receive Child Benefit payments, you still need to register, but tick the box on the form to say you do not want to receive payments. Otherwise you will have to buy back the National Insurance paying years you missed, while caring for your children, in order to qualify for your State Pension.
Published on 21/02/2013 © Listentotaxman.