High Income Child Benefit Charge Explained
A tax charge that claws back Child Benefit from families where the higher earner makes over £60,000. Repaid through Self Assessment at 1% of the benefit for every £200 of income above the threshold.
What is High Income Child Benefit Charge?
The High Income Child Benefit Charge (HICBC) was introduced in 2013 to reduce Child Benefit payments for higher earners. From April 2024, the threshold increased from £50,000 to £60,000 and the taper extended to £80,000. If either parent (or their partner) has adjusted net income above £60,000, the charge applies. It is based on individual income, not household income.
How it works
The charge is 1% of the total Child Benefit received for every £200 of income above £60,000. At £80,000 (£20,000 above the threshold), the charge equals 100% of the benefit. You must file a Self Assessment return to pay it. The charge is based on adjusted net income, which can be reduced by pension contributions or Gift Aid donations.
Real example
Paul earns £65,000 and his partner claims Child Benefit of £2,251.60 for two children. Paul is £5,000 above the threshold. The charge is 25% of the benefit (£5,000 / £200 = 25 percentage points). He repays £562.90 through Self Assessment, keeping a net benefit of £1,688.70.
Who does this affect?
Families where one parent earns between £60,000 and £80,000. Around 700,000 families are affected. If both parents earn £59,000 each (household income of £118,000), no charge applies because it is based on individual, not household income. Making pension contributions via salary sacrifice can reduce adjusted net income below the threshold.
HMRC source
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