Parents should be aware of a number of factors that will affect them as their children turn 16, and they may be out of pocket if they do not take action:
From September 2013 children who live in England are required by law to remain in education or training until the end of the academic year in which they turn 17. As the school/education leaving age has been increased to 18, it is a moot point for parent in Kent at least that the bus Freedom pass increases in cost from £100 to £500 for those two years, although there are campaigns for this to revert to the lower level.
Perhaps less know is that child benefit and child tax credit both stop automatically on 31st August if the child’s 16th birthday has passed. However where the child is in approved education or training (which they now will be), the parent who claims the child benefit is entitled to extend that claim until the child reaches their 20th birthday. Approved education includes schooling, at least 12 hours of supervised study per week or an apprenticeship.
If you are one of those parents, and you want to continue to receive the child benefit, you need to contact the Child Benefit office at HMRC, to inform them that your child is still in approved education or training. Similarly for child tax credit the claimant must contact the Tax Credit office. Despite child benefit and child tax credit both being administered by HMRC, you need to inform them twice, as the different sections of HMRC cannot pass the information across.
If one of the parents earns over £50k they will have to consider the High Income Child Benefit Charge which has been posted in an earlier post. This article provides information on some areas affecting parents of 16+ children but may not wholly apply to your situation so you should seek professional advice before taking any steps based on the contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”