Call us: Mon - Fri 8:30am - 7pm, Sat - Sun 9am - 5pm
Call local rate 0330 056 3171
Mon - Fri 8:30am - 7pm | Sat - Sun 9am - 5pm
Call local rate 0330 056 3171
Mon - Fri 8:30am - 7pm | Sat - Sun 9am - 5pm

Child benefit cuts could mean £50,000 loss say accountants

Imminent cuts to child benefit could cost higher earning families as much as £50,000, according to an analysis by accountants PwC.

The firm’s calculations are based on a family with three children aged five, three and one, where at least one partner earns £60,000 or more. The analysis runs from when the cuts are implemented in January 2013 to when the youngest child reaching his or her 18th birthday.

Families with two children will be around £40,000 worse off over the same period, the firm projects. The calculations incorporate estimated inflation over the same period.

Currently child benefit is paid universally at a rate of £20.30 per week for the first child and £13.40 for any additional children. However, this will change from January 2013, when families with at least one partner earning more than £50,000 and living in the UK will be subject to an additional sliding tax to pay back part of the benefit. Families with at least one partner earning more than £60,000 will be taxed the entirety of the benefit. Affected families will need to fill in self-assessment tax forms.

PwC tax partner Alex Henderson said:

“Many people affected by the child benefit cuts have probably not considered what the true cost will be to them over time. Our projections show the cost could be substantial, and could ultimately mean many middle-income families have to work longer until retirement or until they can pay back debts.”

The blog team at Stowe is a group of writers based across our family law offices who share their advice on the wellbeing and emotional aspects of divorce or separation from personal experience. As well as pieces from our family law solicitors, guest contributors also regularly contribute to share their knowledge.

Contact us

As the UK's largest family law firm we understand that every case is personal.

Leave a comment

Help & advice categories


Newsletter Sign Up

Sign up for advice on divorce and relationships from our lawyers, divorce coaches and relationship experts.

What type of information are you looking for?

Privacy Policy