Currently, where you or the person you live with has a child for which child benefit is being claimed and the higher earner’s taxable income exceeds £50,000, the child benefit will start to be clawed back until taxable income reaches £60,000, when it is clawed back in full.
If you earn over £60,000, you may have thought that it has not been worth claiming child benefit as there has been no advantage to doing so. However, it is possible to claim it but opt-out from receiving it; thus avoiding the HMRC clawback.
What are the benefits?
The benefit of claiming child benefit is that the claimant will receive national insurance credits whilst on maternity leave, and the child will automatically receive their national insurance numbers when they turn 16.
Coronavirus is hitting income for employees and business owners, and it may be that loss of earnings or profits causes your income for 2020/21 to fall below the £60,000 threshold meaning that you would gain some financial benefit from claiming child benefit.
Don’t leave reviewing your income until later when you have better visibility of what your earnings are. Child benefit will not be paid for any period earlier than three months before the date of your claim.
Don't risk missing out
If there is the slightest possibility that you (or the person liable to pay the HICBC) will have taxable income of less than £60,000, you should claim child benefit. The worst-case outcome is that the HICBC will neutralise the financial advantage, though not the non-financial benefits.