High earners need to prepare for January

Brian MacDonald outside his home on the Berewood estate in  Waterlooville Picture: Malcolm Wells (170426-1650)

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HIGH earners in the Portsmouth region will need to think very carefully about the impact of changes to child benefit next month, particularly if they earn between £50,000 and £60,000.

From January 7 the government will start clawing back child benefit – by way of an extra tax charge – from those households where one parent earns more than £50,000.

Trevor Hayman is associate tax director at the south coast office of Smith & Williamson, the accountancy and investment management group.

He said: ‘Child benefit will be withdrawn by one per cent for every £100 that a parent’s income exceeds £50,000, with all of the benefit being clawed back once income exceeds £60,000.

‘So, in these cash-strapped times, it’s important for families to review their finances and consider ways in which they might be able to minimise the impact.’

He added that options included paying more into pension funds.

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