Child Benefit Tax Charge 2025-26: The £60,000 Threshold Explained

Child benefit is a tax-free payment made to parents or carers responsible for a child under 16 (or under 20 if in approved education or training). In 2025-26, the rates are £25.60 per week for the eldest child (£1,331.20 per year) and £16.95 per week for each additional child (£881.40 per year). The High Income Child Benefit Tax Charge (HICBC) claws back some or all of this payment when one person in a household earns above £60,000.

The April 2024 change: threshold raised to £60,000

Prior to 6 April 2024, the HICBC kicked in at £50,000 — a threshold that had not moved since 2013, despite significant wage inflation. From April 2024, the threshold was raised to £60,000, and the point at which the charge equals 100% of child benefit was raised to £80,000 (previously £60,000). This change removed the charge entirely for families where neither partner earns over £60,000, and reduced it significantly for those between £60,000 and £80,000.

How the charge is calculated

The charge is 1% of the child benefit received for every £200 by which the higher earner's adjusted net income exceeds £60,000. This creates a taper:

• Income £60,000 or below: No charge. You keep 100% of child benefit.
• Income £70,000: Charge = 50% of child benefit (£10,000 over threshold ÷ £200 = 50 × 1% = 50%).
• Income £80,000 or above: Charge = 100% of child benefit. You effectively receive nothing.

Example: A family with two children receives child benefit of £1,331.20 + £881.40 = £2,212.60 per year. If one parent earns £70,000:

• Excess above threshold: £70,000 − £60,000 = £10,000
• Number of £200 units: 50
• Charge: 50 × 1% × £2,212.60 = £1,106.30
• Net child benefit retained: £2,212.60 − £1,106.30 = £1,106.30

Adjusted net income: the figure that matters

Adjusted net income is not the same as your gross salary. It is your total income minus certain deductions including:

• Personal pension contributions (gross amount, including basic rate relief).
• Gift Aid donations (grossed up).
• Trading losses.

This means pension contributions are a powerful tool for reducing your adjusted net income below £60,000 and eliminating the charge entirely.

How to pay the charge

The HICBC is paid through Self Assessment. If you or your partner is subject to the charge, the higher earner must register for Self Assessment and declare it in their tax return, even if they are normally a PAYE employee. HMRC has run campaigns to contact those who failed to register, sometimes resulting in unexpected backdated bills.

The opt-out option

You can choose to stop receiving child benefit payments to avoid the administrative burden of Self Assessment. This does not affect your entitlement — you still build up a National Insurance record (important for the State Pension) as long as the claim is registered, even if payments are stopped. If your income later drops below £60,000, you can restart payments.

Important: it is the higher earner who pays, not the higher household income

The HICBC is based on individual income, not combined household income. A couple where one earns £75,000 and the other earns nothing pays more charge than a couple where both earn £59,000 each (combined £118,000 — but neither triggers the charge). This is widely regarded as one of the most inequitable aspects of the UK tax system and has been the subject of legal challenges, though it remains in force.

HMRC repayment campaign

HMRC has actively pursued individuals who received child benefit but failed to register for Self Assessment and pay the HICBC. If you have been affected by historical errors or missed registrations, HMRC offers a digital service to check your position and make voluntary disclosures. Acting proactively typically results in lower penalties than being investigated.

Frequently asked questions

Does the threshold apply to my salary before or after pension?

After. Pension contributions reduce your adjusted net income. If you earn £65,000 gross and make £6,000 in personal pension contributions, your adjusted net income is £59,000 — below the £60,000 threshold. You would pay no HICBC. This is one of the most effective and legitimate ways to protect child benefit.

What if my income fluctuates around £60,000?

You are assessed on the income in each specific tax year. If your income falls below £60,000 in a given year, there is no charge for that year, even if you were above the threshold the year before. Review your position each year and restart or stop child benefit payments accordingly.

Can I claim child benefit if I have not been paying into the system?

Child benefit is not means-tested or contribution-based — it is paid to anyone responsible for a qualifying child who applies, regardless of employment history. However, only a claimant who is not earning over the threshold (or who opts to receive payments) will benefit financially. Even those subject to the full charge should still register to preserve their NI record.