Child benefit warning

Published on 26th March 2020

On the birth of a child, it is important to register for child benefit. Registering provides the parent with National Insurance credits for future state pension purposes and informs HMRC to issue a National Insurance number when the child reaches age 16. Most families will also benefit from receiving child benefit.

Families are required to repay child benefit with their income tax if either parent’s income exceeds £50,000. Most farmers’ incomes are lower, in which case there is no need to disclose child benefit in the tax return.

But farming profits fluctuate and there may be one-off years when a farmer’s income exceeds £50,000. When that happens, it is important you provide us with details of child benefit (even if received by a partner), so the clawback charge is included in your tax return. HMRC know who receives child benefit and they frequently enquire into higher income tax returns where a clawback charge is missing.

If you are in the position of consistently having income above £60,000, an opt-out claim can be made to avoid receiving child benefit and having to repay it all.