Martin Lewis: £60,000 Earners, Claim This!
MoneySavingExpert.com founder Martin Lewis has been sounding the alarm for UK residents earning around £60,000 to check their eligibility for a significant tax refund. This potential windfall comes from a little-known tax loophole that many eligible individuals are unaware of.
What's the Tax Loophole?
The issue lies in the way the "Personal Allowance" is handled for higher earners. In simple terms, your Personal Allowance is the amount of income you can earn tax-free each year. For 2023/24, this stands at £12,570.
However, this allowance gradually reduces for those earning over £100,000, eventually disappearing completely for those earning over £125,140. This reduction is known as the "High Income Child Benefit Charge".
Here's the catch: Even if you're earning over £100,000, you might be eligible for a tax refund if you're claiming Child Benefit or have children under 16. This is because the High Income Child Benefit Charge is calculated based on your adjusted net income, which is your total income minus your Personal Allowance, pension contributions, and gift aid donations.
How Could You Be Due a Refund?
Let's say you earn £60,000 per year and have two children. You're likely receiving Child Benefit, but because your income is over £50,000, HMRC will begin to claw back some of the benefit.
However, you might still be eligible for a tax refund. If your adjusted net income falls below the £50,000 threshold after accounting for your Personal Allowance and other deductible expenses, you could be due a refund of the Child Benefit Charge you've already paid.
Check Your Eligibility
It's crucial to remember that everyone's financial situation is unique. You need to check your own circumstances to determine if you're eligible for a tax refund.
Here's how to check your eligibility:
- Use the HMRC online calculator: HMRC provides a free and straightforward tool to assess your potential refund. This is the easiest way to quickly determine if you're due a refund.
- Contact a tax advisor: If you're unsure about your specific situation or require more in-depth guidance, speaking to a qualified tax advisor can provide you with tailored advice.
Don't Miss Out
Don't let potentially significant tax refunds slip through your fingers! If you're earning around £60,000 or more and have children, it's absolutely worth your time to check your eligibility. You might be surprised by what you find.
Remember: This information is for general guidance only and doesn't constitute professional financial or tax advice. Always seek advice from a qualified expert before making any financial decisions.