How Does the Child Benefit Tax Charge Work?
The High Income Child Benefit Tax Charge (HICBC) claws back Child Benefit when either partner earns above £60,000. Updated thresholds in 2024 mean fewer families are affected — but the charge still catches many households by surprise.
Child Benefit Rates 2025-26
Child Benefit is a weekly payment from HMRC for families with children under 16 (or under 20 in approved education or training):
| Child | Weekly Rate | Annual Total |
|---|---|---|
| First or only child | £25.60 | £1,331.20 |
| Each additional child | £16.95 | £881.40 |
A family with two children receives £25.60 + £16.95 = £42.55/week, or £2,212.60/year in total.
What Is the High Income Child Benefit Tax Charge?
The HICBC is a tax charge that claws back Child Benefit when either partner in a household has adjusted net income above £60,000. Adjusted net income is your total income (salary, self-employment profit, rental income, dividends, savings interest) minus any personal pension contributions and Gift Aid donations.
The charge rate is 1% of Child Benefit received for every £200 of income above £60,000. This means:
- At £60,000 — no charge (0%)
- At £70,000 — charge of 50% of Child Benefit received
- At £80,000 or above — charge of 100% (full repayment)
Worked Example: £70,000 Earner with Two Children
Annual Child Benefit: £25.60 × 52 + £16.95 × 52 = £1,331.20 + £881.40 = £2,212.60
Income above threshold: £70,000 − £60,000 = £10,000
Charge rate: £10,000 ÷ £200 × 1% = 50%
Tax charge: 50% × £2,212.60 = £1,106.30 owed via Self Assessment
The family receives £2,212.60 in Child Benefit but must repay £1,106.30 in tax, keeping a net benefit of £1,106.30.
The 2024 Threshold Change
Prior to April 2024, the HICBC taper began at £50,000 and reached 100% at just £60,000 — meaning Child Benefit was fully withdrawn over a much narrower £10,000 band, creating an effective marginal tax rate above 60% for some earners. The government raised the threshold to £60,000 and widened the taper to £80,000 from 6 April 2024, reducing the charge for around 170,000 families.
How the Charge Is Paid
The HICBC is collected through Self Assessment. If either partner's income exceeds £60,000 and you receive Child Benefit, you must:
- Register for Self Assessment (if not already registered)
- File a tax return for each tax year you receive Child Benefit
- Pay the HICBC by 31 January following the tax year end
Payments on Account (two instalments in January and July) may also apply if the charge is significant.
Should You Opt Out of Child Benefit?
If your income is well above £80,000, you might consider opting out of receiving Child Benefit payments to avoid the complexity of Self Assessment. However, you should still register for Child Benefit even if you opt out of payments — registration protects the non-earning parent's National Insurance record, which counts toward the State Pension. You can opt back in if circumstances change.
Reducing the Charge Legally
Because the HICBC is based on adjusted net income, pension contributions and Gift Aid donations reduce it. A taxpayer earning £70,000 who makes £10,000 of pension contributions drops their adjusted net income to £60,000, eliminating the charge entirely — and saving both the HICBC and the income tax on those contributions.
Frequently Asked Questions
When does the Child Benefit tax charge apply?
The HICBC applies when either partner in the household has adjusted net income above £60,000. The charge tapers from 0% at £60,000 to 100% repayment at £80,000. Below £60,000 you keep Child Benefit in full with no charge.
How do I pay the High Income Child Benefit charge?
Through Self Assessment. You must register and file a tax return if either partner earns above £60,000 and you receive Child Benefit. The charge is due by 31 January following the end of the tax year.
Should I stop claiming Child Benefit?
You can opt out of payments to avoid Self Assessment, but you should still register for Child Benefit to protect NI credits for the State Pension — especially important for a non-working parent. You can opt back in at any time.