With effect from 7 January 2013, HMRC introduced the “child benefit charge” for taxpayers with income over £50,000. Many recipients of the child benefit would have received letters around November 2012 informing them of the new charge.
HMRC have advised that those affected will need to either:
a) Elect to stop receiving child benefit from 7 January 2013 and avoid the new charge, or
b) Keep receiving child benefit after this date and declare the payments on their tax returns (or have their PAYE adjusted to collect relevant charges)

The charge will affect taxpayers, or their partners, who are in receipt of the child benefit where either of them has income in excess of £50,000 in a tax year. (If both partners have income in excess of £50,000 the charge will only apply to the highest earning partner.).

Where income is at least £60,000 then the full amount of the child benefit will be subject to the new charge – the amount of the charge will equal the amount of the child benefit received.

If, however, income is between £50,000 – £60,000, the amount of the charge will be 1% of the child benefit for every £100 of income exceeding £50,000.
The charge will, in a number of cases, be collected through self assessment returns. However, the PAYE regulations have been extended to enable the charge to be collected through PAYE unless the taxpayer objects (HMRC is likely to do this in most cases).

The election can be made by submitting an online form available at HMRC website. More guidance in respect of the child benefit charge can be found on HMRC website.