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HMRC internal manual

Child Benefit Technical Manual

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HM Revenue & Customs
Updated
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Overview and purpose: The purpose of Child Benefit and Guardian’s Allowance

Child Benefit

Child Benefit is a tax-free, non-means-tested benefit, administered by the Her Majesty’s Revenue & Customs (HMRC), paid to people who are responsible for, or treated as responsible for children or qualifying young persons. There are two rates of payment:

  • higher rate payable for the eldest or only child or qualifying young person in the family unit,
  • basic rate payable for all other children or qualifying young persons in the family unit.

If the eldest children or qualifying young persons are twins, the higher rate is payable only for the elder twin.

If two children or qualifying young persons in the same family unit qualify, the higher rate is payable only for the eldest child or qualifying young person. For example, two persons each with a child or qualifying young person form a new family unit. Before this they were both receiving higher rate for their eldest child or qualifying young person, but now the new family unit is formed, the higher rate is payable only for the eldest child or qualifying young person in that family. This applies regardless of whether each parent continues to claim Child Benefit separately.

Child Benefit is payable to only one person for a particular child or qualifying young person in any one week. Where two people satisfy the entitlement conditions, only one of them can be entitled and receive payment. The law provides rules to decide which one of them it will be.

The child or qualifying young person must be present, or treated as being present in Great Britain or Northern Ireland as the case may be in that week, and the claimant both present and ordinarily resident in Great Britain or Northern Ireland.

No one subject to immigration control is entitled to Child Benefit except in special circumstances. Regulations prescribe other circumstances in which Child Benefit cannot be paid.

From 7 January 2013, the High Income Child Benefit charge was introduced. This means that if a person or their partner, if they have one, has an individual adjusted net income of more than £50,000, the person with the higher income will be liable to a tax charge on some or all of the Child Benefit they are entitled to receive.

Where a person or their partner is liable to the High Income Child Benefit charge from 7 January 2013, the person who is the Child Benefit claimant can either decide to

  • stop their Child Benefit payments. This means a person remains entitled to Child Benefit but does not receive payment and so they, or their partner, do not have to declare the Child Benefit they are entitled to receive as a tax charge, or
  • continue to receive their Child Benefit payments. This means the person or their partner will have to declare some or all of the Child Benefit they are entitled to receive as a tax charge through the Self Assessment process.

Where more than one child is included on a Child Benefit award, the Child Benefit claimant’s decision to stop or start their Child Benefit payments applies to every child on their award.

The tax charge will be

  • 1% of the Child Benefit paid for every £100 of income received over £50,000 and up to £60,000 or

A charge equal to the full amount of Child Benefit paid for income over £60,000

Guardian’s Allowance

Guardian’s Allowance is a tax-free allowance, administered by the Her Majesty’s Revenue & Customs. It is paid in addition to Child Benefit to people bringing up a child or qualifying young person whose parents have died, but can sometimes be paid when only one parent has died. It is paid at one rate for all children or qualifying young persons.

Note: Guardian’s Allowance is not affected by the High Income Child Benefit charge which means that although a person can decide not to be paid Child Benefit, if they are entitled to Guardian’s Allowance, payments of Guardian’s Allowance will still be paid

Deciding entitlement to Child Benefit and Guardian’s Allowance

Entitlement is decided by an officer of Her Majesty’s Revenue & Customs.