Child Benefit

There are two weekly Child Benefit rates:

• For a first-born or only child: £24.00
• For additional children: £15.90 per child

This applies even for a multiple birth, so if you have twins born within minutes of each other, you'll still get different amounts for them.

If you've a bigger brood, the individual amount you get for your second and subsequent children will be lower, but the total will be higher.

You'll usually be paid every four weeks, on a Monday or Tuesday, and the whole amount must go into the same account. It can't be split between parents.

While it may not look like a lot of money broken down, it adds up. If you claim for one child until they're 16, you'll get more than £17,000 over their childhood.            

If you (or your partner) earn more than £50,000 a year, you will still get the full amount of Child Benefit, but you will have to pay some of it back. This is known as the 'high income Child Benefit tax charge'. 

• How do I know if I'll have to pay back some of the Child Benefit? To work out how much you will have to pay back, you need to work out your 'adjusted net income'. This is your total taxable income before any personal allowances and less certain tax reliefs.
  
  So you need to include things such as:
  - Salary
  - Profits if you're self-employed
  - Rental income
  - Some state benefits
  
  And then deduct things such as:
  - Pension contributions (more on this below)
  - Trading losses, for example, trade loss relief or property loss relief
  - Gift Aid donations

If you're not sure if you're liable to pay the tax charge or think you will but not sure how much, use the Government's Child Benefit Tax Calculator to see if, and how much, you have to pay. 

• How much will I have to pay back? It is tapered, so the more you earn over £50,000 a year, the more you need to pay back.
  
  - For every £100 you receive above £50,000, you need to pay back 1% of the maximum amount of Child Benefit you're entitled to. So, if you earn £55,000 a year, you'll pay back 50%.
  - Once you hit £60,000 a year, the charge you'll pay back is 100% of your entitlement, meaning you won't get any benefit.
  
  
• How do I pay it? If you or your partner, or both of you, receive an annual income above £50,000, the one getting the most MUST fill in a self-assessment tax return – even if you're already paying tax via your employer in the pay-as-you-earn system.
  
  You'll have to register for self-assessment and send in a tax return every year. If you're not sure you've enough income to pay the charge, it's probably a good idea to register anyway. If you do need to pay the charge, and don't file a tax return, you could be fined up to 30% of what you owe by HMRC.
  
  If you're claiming and worry you may need to pay the tax charge, you could keep the money in a separate savings account. That way, you'll be covered if you need to pay the charge and anything you get to keep is a bonus. You'll also earn interest on the money. See our Top savings accounts guide for more details.

Can I avoid paying the high income Child Benefit charge?

If your income is above £50,000 a year, you might still be able to swerve the charge. That's because it's based on your 'adjusted net income' (your total taxable income minus certain tax reliefs – for example, pension contributions and Gift Aid charity donations). So, if you pay any tax-deductible expenses, these might take you below the threshold, or at least reduce how much you may have to pay back.

The main way you can minimise the charge is by upping your pension contributions. However, before considering doing this, see if your current pension contributions might already take your adjusted pay below £50,000. For example, if you're on £52,000 a year and contribute 5% of your salary into your pension, you won't have to pay any charge.

ALL types of pension can help to reduce your 'adjusted net income', and therefore the amount you'd be liable to pay. This includes self-invested personal pensions, any additional voluntary contributions as well as any other contributions to workplace or personal pensions (and it doesn't matter if you were auto-enrolled or not). It does NOT include Lifetime ISAs, however, as they're not strictly pensions. 

How you calculate how much pension contribution to take away depends on whether it's going from your before-tax or after-tax pay: 

• Employer pension scheme: If it goes straight from your before-tax ('gross') pay into a pension, for example an employer pension scheme, you can deduct that same gross amount. Usually the figure on your P60 will already reflect the deduction and is the amount to enter in the adjusted net income calculation with no further deduction. 
  
  
• Personal pension: If it comes out of your after-tax ('net') pay, for example if you have a personal pension, you can deduct more – £100 for every £80 you pay in if you pay tax at 20%, and £133 for every £80 you pay in if you pay tax at 40%. 

Here's an example...

Peter earns £52,000 a year, but 7% of his pre-tax income (£3,640) is used to make pension contributions. To see if Peter needs to pay the tax charge, we need to deduct £3,640 from his actual salary – leaving £48,360. In this case, Peter's pension contributions take him below the threshold, so he won't need to pay the tax charge.