High Income Child Benefit Charge
The High Income Child Benefit Charge claws back Child Benefit from families where one parent earns over £60,000. This guide explains the charge, how it is calculated, and the choices families face about opting out.
What is the High Income Child Benefit Charge?
The High Income Child Benefit Charge (HICBC) is a tax charge that applies when a parent or their partner has adjusted net income exceeding £60,000 in a tax year. It effectively claws back some or all of the Child Benefit received by the family.
The charge was introduced in January 2013 with an original threshold of £50,000. From April 2024, the threshold was raised to £60,000 and the taper band widened to reduce the impact on affected families.
How Child Benefit Works
Child Benefit is a universal payment made to anyone responsible for raising a child. The 2025/26 weekly rates are:
| Child | Weekly rate | Annual amount |
|---|---|---|
| First or only child | £26.05 | £1,354.60 |
| Each additional child | £17.25 | £897.00 |
Child Benefit is paid to one parent (or carer) per child, regardless of household income. The HICBC then recovers some or all of this benefit through the tax system when certain income thresholds are breached.
When the Charge Applies
The HICBC applies to the higher earner in a household where:
- Either parent (or their partner) has adjusted net income above £60,000
- Child Benefit is being received by someone in the household
It does not matter which parent claims Child Benefit — the charge falls on whichever partner has the higher income.
The Taper
The charge operates on a sliding scale between £60,000 and £80,000:
| Adjusted net income | Percentage of Child Benefit clawed back |
|---|---|
| Up to £60,000 | 0% — no charge |
| £60,001 to £80,000 | 1% for every £200 above £60,000 |
| Over £80,000 | 100% — full amount repaid |
Calculation Example
A family with two children receiving total Child Benefit of £2,251.60 per year, where the higher earner has income of £70,000:
| Step | Calculation |
|---|---|
| Income above £60,000 | £10,000 |
| Number of £200 bands | 50 |
| Percentage clawed back | 50% |
| Child Benefit received | £2,251.60 |
| HICBC payable | £1,125.80 |
The family keeps roughly half of the Child Benefit in this scenario.
Self-Assessment Requirement
If you are liable to the HICBC, you must register for self-assessment and file a tax return, even if all your income is taxed through PAYE. The HICBC is reported and paid through the self-assessment system.
Failing to register and pay the charge can result in penalties and interest. HMRC has actively pursued families who were unaware of the requirement, and ignorance of the charge is not accepted as a reasonable excuse.
Opting Out of Child Benefit
Families can choose to stop receiving Child Benefit payments to avoid the HICBC and the obligation to file a self-assessment return. However, it is important to still submit a Child Benefit claim even if you opt out of payments.
Why You Should Still Claim
There are two important reasons to submit a claim even if payments are stopped:
- National Insurance credits — The parent who claims Child Benefit (and is not working or earning below the NI threshold) receives Class 3 National Insurance credits, which protect their state pension entitlement
- National Insurance number — The child is automatically issued a National Insurance number shortly before their 16th birthday
If you do not submit a claim at all, you lose these benefits permanently.
Adjusted Net Income
The charge is based on adjusted net income, not gross salary. This means certain deductions reduce the income figure used for the HICBC calculation:
- Pension contributions (including salary sacrifice pension contributions)
- Gift Aid donations (the gross amount)
- Trading losses
Using Pension Contributions to Avoid the Charge
This is the most common strategy. If your gross salary is £65,000 and you make pension contributions of £5,000 (net), the gross contribution (with basic rate relief) is £6,250. After the Gift Aid gross-up, your adjusted net income falls to £58,750, taking you below the £60,000 threshold.
| Item | Amount |
|---|---|
| Gross salary | £65,000 |
| Pension contribution (gross) | £6,250 |
| Adjusted net income | £58,750 |
| HICBC liability | £0 |
This approach provides triple tax relief: income tax relief on the pension contribution, employer NI savings (if via salary sacrifice), and elimination of the HICBC.
Impact on the Personal Allowance
The HICBC and the personal allowance taper are separate mechanisms, but both use adjusted net income as their measure. The personal allowance taper begins at £100,000, well above the HICBC range. However, families where the higher earner approaches £100,000 face the compounding effect of both the HICBC and the personal allowance taper.
Who Pays the Charge?
The charge falls on the individual with the higher income, regardless of which partner receives the Child Benefit payments. This can create complications in households where:
- Partners have similar incomes near the threshold
- One partner is unaware of the other’s income level
- The couple is separated but one partner still claims Child Benefit
In shared custody arrangements, the parent who receives Child Benefit for the child is the one whose household is assessed.
Interaction with Income Tax
The HICBC is treated as an income tax charge rather than a separate tax. It appears on your self-assessment return and is added to your income tax liability. However, it does not affect your tax code or change the amount of tax deducted through PAYE during the year.
Record-Keeping
If you are subject to the HICBC, keep records of:
- Total Child Benefit received during the tax year (HMRC provides an annual statement)
- Your adjusted net income calculation, including pension contributions and Gift Aid donations
- Any periods during the year when Child Benefit was started or stopped
- Dates when children left the household or ceased to qualify (e.g., turned 16 and left full-time education)