“Is it fair where there is a step-parent and the child is not theirs that the other parent should lose this benefit?”
It’s panto season once again or as I like to call it The Higher Income Child Benefit Charge.
We’ve had two calls about this new charge to the helpdesk this week:
The first was that our software was not calculating the charge although an amount of benefit had been entered in the relevant box on page 2 of the main return and the income was over £50,000 and the second was asserting that the software was failing to take into account the personal allowances before determining the amount charged…
The basic rules for determining the income for the charge are the standard net income rules that have existed since Baron Hardup was the King’s Tax Collector - total income less specified deductions, the most important of which are trading losses and payments made gross to pension schemes followed by grossed up pension deductions to schemes with relief at source and grossed up charitable donations - but not of course personal allowances.
In example one the caller had overlooked a considerable personal pension payment which brought the net income down below £50,000 and thus removed the charge altogether. :)
Caller two was just sadly wrong in their assumption. :(
And the point of our title?… well, Baron Hardup was receiving CB for Cinderella after the death of her poor mother and being poor after losing his Tax Collection post due to downsizing he had no problems with the £50,000 limit.
But then he remarried and his new wife Cruella Deville is in receipt of income from the family trust fund of some £200,000 a year.
Of course she is not Cinderella’s mother as we all know but the Baron still has to pay back all the CB from the date of marriage to the end of that tax year and then each year thereafter…. as you will see if you browse the link below to Q3: