On 7 January 2013 a new tax charge was introduced when a taxpayer or their partner gets child benefit, and either of them has taxable income in excess of £50,000 a year.
For every £100 of taxable income above £50,000 a 1% child benefit tax charge will be imposed.
Where one parent has adjusted net income exceeding £60,000 a tax charge equivalent to all the child benefit will be imposed.
To mitigate the child benefit tax charge it is possible for the parent to reduce their taxable income by making a pension contribution.
We have developed an easy to use calculator that demonstrates how it is possible to mitigate the child benefit tax charge at the same time as saving into a pension.
Start using our Child Benefit Calculator.