All posts by Terry Harris

Are you affected by the High Income Child Benefit Charge?

Families claiming Child Benefit should be aware of the High Income Child Benefit Charge (HICBC), which can apply when one member of the household has a higher income.

The charge applies where an individual has adjusted net income of more than £60,000 in a tax year and either they or their partner receives a Child Benefit payment. The amount payable increases gradually as income rises, with the charge set at 1% of the Child Benefit received for every £200 of income above £60,000.

As a result, the impact of the charge is phased in rather than applying all at once. However, once income reaches £80,000, the charge effectively claws back all of the Child Benefit received, removing the direct financial benefit of the payments.

Eligible taxpayers can elect to have the charge collected through their PAYE tax code rather than completing a self-assessment tax return. This measure is intended to reduce the administrative burden for employees whose only reason for filing a self-assessment tax return is to declare the HICBC.

Although some families choose to stop receiving Child Benefit to avoid the charge, it is often worthwhile to continue making a claim. Registering for Child Benefit can help protect entitlement to National Insurance credits for parents or carers and ensures children are automatically issued with a National Insurance number shortly before their 16th birthday.

Taxpayers with income approaching or exceeding £60,000 should review their position regularly to ensure they are complying with the rules and making the most appropriate choice for their circumstances.

A reminder to consider the Marriage Allowance

Many married couples and civil partners could be missing out on valuable tax savings available by claiming the Marriage Allowance. If your circumstances are suitable, this is a reminder to consider the Marriage Allowance, as a simple claim could reduce your tax bill by up to £252 during the 2026-27 tax year.

The Marriage Allowance allows a spouse or civil partner with income below their Personal Allowance to transfer £1,260 of that allowance to their partner. The standard Personal Allowance is £12,570 for the 2026-27 tax year. To qualify, the person receiving the transfer must normally be a basic-rate taxpayer and the higher-earning partner must also be a basic rate taxpayer. This generally means they have income between £12,571 and £50,270 during 2026-27. Different limits apply for Scottish taxpayers because of Scotland's separate Income Tax bands.

Although the transfer reduces the lower earner's Personal Allowance, the overall effect is usually beneficial for the couple as a whole. For many households, it provides an easy way to reduce the amount of Income Tax paid without making any changes to their working arrangements or income levels.

It is also worth remembering that claims can be backdated where eligibility existed in earlier years. Eligible couples can currently backdate a claim to 6 April 2022, which could result in a useful lump-sum repayment from HMRC.

Once a successful claim has been made, the allowance will usually continue automatically in future tax years unless it is cancelled or a change in circumstances affects eligibility. Couples whose income levels have changed recently may therefore wish to review whether they qualify and ensure they are not overlooking this tax-saving opportunity.

Who pays Income Tax at Scottish rates?

The rules as to who pays Income Tax in Scotland is determined by whether an individual is considered a Scottish taxpayer or not. For most people, determining Scottish taxpayer status is straightforward. Individuals who live in Scotland are considered Scottish taxpayers, while those who live elsewhere in the UK are not.

If a taxpayer has homes in both Scotland and elsewhere in the UK, HMRC guidance is used to determine their main home for Scottish Income Tax purposes. Those without a permanent home who regularly stay in Scotland, such as offshore workers or hotel residents, may also be liable for SRIT.

If a person moves to or from Scotland during a tax year, their tax liability is determined by where they spent the majority of that year. Scottish taxpayer status applies to the entire tax year and cannot be split.

Those defined as Scottish taxpayers are liable to pay the Scottish Rate of Income Tax (SRIT) on their non-savings and non-dividend income.

Filing your 2025-26 self-assessment tax return

The 2025–26 tax year ended on 5 April 2026, and attention now turns to filing your self-assessment tax return. While many leave this until the last minute, there are advantages to filing early.

There are two ways to file your return. You can submit a paper return, which must be filed by 31 October 2026, or file online, with a deadline of 31 January 2027. The 31 January deadline is also when any tax due for 2025–26 must be paid, along with the first payment on account for 2026–27.

Although the deadline may seem distant, preparing your return early can make a significant difference. Filing early does not accelerate the payment date, but it does give you certainty over how much tax you owe. This allows time to budget and set funds aside, avoiding pressure in January.

There are other benefits too. If you are due a refund, submitting early means you receive it sooner. It also gives more time to gather missing information, resolve queries, and avoid the last-minute rush when systems are busy and deadlines are tight.

In short, early preparation puts you in more control, whether that means planning for a future tax bill or importantly securing a repayment without delay.