For many families, Child Benefit is a welcome source of financial support. But if you or your partner earn above a certain threshold, you may find yourself liable for the High Income Child Benefit Charge (HICBC). A tax charge that claws back some or all of the benefit through the tax system. Understanding how it works, and how to plan around it, can help you avoid unexpected tax bills.

What Is the High Income Child Benefit Charge?

The HICBC applies if either you or your partner receive Child Benefit and one of you has an income above the threshold. It doesn’t matter whether the child living with you is your own, the charge can also apply if someone else claims Child Benefit for a child living in your household and contributes at least as much towards that child’s upkeep as you do.

The Current Threshold?

For tax years from 2024–25 onwards, the threshold is £60,000. If your adjusted net income exceeds this, you’ll start to lose some of your Child Benefit through the charge. Once income reaches £80,000, the charge equals the full amount of Child Benefit received, effectively cancelling it out.

For tax years up to and including 2023–24, the threshold was lower, at £50,000, with full withdrawal at £60,000.

Working Out Your Adjusted Net Income

Your adjusted net income is your total taxable income including savings interest and dividends, calculated before Personal Allowances but after certain reliefs, such as pension contributions and Gift Aid. 

This is an important point: increasing pension contributions can reduce your adjusted net income and, in some cases, bring you back under the threshold entirely.

How the Charge Is Calculated

For 2024–25 onwards, you’ll repay 1% of your Child Benefit for every £200 of income above £60,000. For example, if your adjusted net income is £67,600, that’s £7,600 over the threshold. Dividing by 200 gives 38, meaning you’d repay 38% of your Child Benefit for the year.

Who Is Liable?

Where both partners have income above the threshold, the charge falls on whichever partner has the higher income. For these purposes, “partner” means someone you’re married to, in a civil partnership with, or living with as if you were provided you’re not permanently separated.

Your Options If You’re Over the Threshold

If your income is above the threshold, you have two choices:

• Continue receiving Child Benefit payments and pay the tax charge, or
• Opt out of receiving payments and avoid the charge altogether

Opting out doesn’t affect your underlying entitlement, you remain registered for Child Benefit, and you’ll still receive National Insurance credits towards your State Pension, along with a National Insurance number for your child issued automatically, rather than needing to apply closer to their 16th birthday.

How to Pay the Charge

There are two routes for paying the HICBC: through PAYE, or through Self Assessment. You must use Self Assessment if you already need to file a tax return for another reason, for example, if you’re self-employed or have investment income or if it’s after 31 January in the year following the relevant tax year.

If you’ve been filing a Self Assessment purely to pay this charge and have no other reason to do so, it’s now possible to contact HMRC and switch to paying via PAYE instead, removing the need for an annual return.

Why This Matters for Your Planning

The HICBC catches many families by surprise, particularly where one partner’s income rises due to a pay increase, bonus, or new role. Because the charge is based on individual income rather than household income, two parents each earning £59,000 will keep their Child Benefit in full, while a single-earner household on £65,000 will face a charge, even though the second household has less combined income.

If you think you might be affected, or if your circumstances have changed this year, it’s worth reviewing your position sooner rather than later. Pension contributions, Gift Aid donations, and other reliefs can all play a role in managing your adjusted net income and, in turn, your Child Benefit position.

Get in Touch

If you’d like help working out whether the High Income Child Benefit Charge applies to you, or want support with reporting and paying it correctly, please get in touch with our team.