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Child benefit letters to be sent

It is thought up to one million letters will be issued during November to families affected by child benefit changes.

The letters sent out will more fully detail the High Income Child Benefit Charge which takes effect from 7 January 2013 for taxpayers. The new charge will apply when one member of the household's income is more than £50,000 in a tax year and if they or their partner receive child benefit.

The charge for those earning over £60,000 will be 100 per cent of child benefit while if income is between £50,000 to £60,000, it gradually increases to 100 per cent.

Those who are to be affected will need to decide whether to keep receiving child benefit and pay the charge through self-assessment or stop receiving it and not have to pay any charge. If income is less than £60,000 the tax charge will always be less than total amount of child benefit and therefore they could lose money they are entitled to.

Those earning £60,000 plus can still receive child benefit each month but will effectively have to pay it back through self-assessment every year as the tax charge equals the amount received.

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