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October 7, 2010

High earners hit by child benefit changes!

In the light of announcements about some big changes in the way child benefits are handed out, your employees will have a number of questions. Make sure you can answer them.

From January 2013 the government is prosing to withdraw child benefit from families in which one or both parents are earning more than £44,000 a year (ie higher rate taxpayers).
This will affect an estimated 3,274,000 individuals who pay tax at these levels.

What do I need to know?

Your employees will have questions about the specifics of the scheme, and how it will affect them directly. They may also want to know about the ways they can avoid losing child benefit.
At present, it is unclear as to how this new means tested system will be set up and administered.
It is likely some people who find themselves just over the higher taxpayer threshold may want to look at flexible or part time work or methods to cut their hours, to ensure they fall just below the cut off point, so employres may have to prepare for a workforce that looks different to the one you have now.

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