How the High Income Child Benefit Charge works
Child Benefit is a universal UK government payment to support families with the costs of raising children. However, under Section 681B of the Income Tax (Earnings and Pensions) Act 2003, if either parent or partner has an adjusted net income above the statutory threshold, the higher earner must pay back some or all of the benefit through the High Income Child Benefit Charge (HICBC).
Following significant reforms in the 2024 Spring Budget, the lower threshold for the charge was raised from £50,000 to £60,000, and the upper threshold was raised from £60,000 to £80,000. Under this reformed system, the tax charge increases by 1% of the total Child Benefit for every £200 of adjusted net income between £60,000 and £80,000.
Worked example of Child Benefit tax charge
Consider a household with two eligible children where the higher-earning partner has an adjusted net income of £65,000.00. For the 2024-25, 2025-26, and 2026-27 tax years, Child Benefit is paid at £25.60 per week for the eldest child and £16.95 per week for the second child, producing a weekly payment of £42.55 and an annual benefit of £2,212.60.
Because the higher earner's income exceeds £60,000.00 by £5,000.00, the HICBC taper applies. Dividing the £5,000.00 excess by £200.00 produces a 25% charge rate. The HICBC tax charge is £553.15 (25% of £2,212.60), payable to HMRC via Self Assessment. The family retains £1,659.45 of their annual Child Benefit, keeping 75% of the total award.
Reducing adjusted net income using pensions and Gift Aid
The High Income Child Benefit Charge is based strictly on adjusted net income, not gross headline salary. Adjusted net income is calculated after deducting allowable personal pension contributions and charitable donations made under Gift Aid.
If your gross income is £65,000 and you contribute £5,000 gross into a personal or workplace pension scheme, your adjusted net income drops to £60,000. This completely eliminates your HICBC liability, allowing your family to retain 100% of your Child Benefit while growing your retirement fund.
Should you claim Child Benefit if earning over £80,000
When the higher earner's adjusted net income exceeds £80,000, the HICBC charge is 100%, meaning all Child Benefit received must be repaid to HMRC. However, parents should still complete the Child Benefit claim form even if they choose to opt out of receiving payments.
Claiming Child Benefit protects the non-working parent's National Insurance record by providing free National Insurance credits towards their future State Pension, and ensures your child automatically receives their National Insurance number at age 16.
To check your personal Income Tax band and Personal Allowance, use our UK income tax calculator.
To calculate your overall balancing payment and Self Assessment tax bill, explore the UK tax return calculator.
To calculate how salary sacrifice reduces taxable income below £60,000, see our UK salary sacrifice calculator.
Inputs for the child benefit tax calculator
Tax year
The UK tax year running from 6 April to 5 April, establishing the statutory benefit rates and HICBC thresholds.
Number of eligible children
The total number of children qualifying for Child Benefit (under 16, or under 20 in approved non-advanced education).
Higher earner's gross annual income
Gross salary, sole trader profits, bonuses, or taxable income of the partner with the higher income in the household.
Gross personal pension contributions
Gross pension contributions made under relief at source, which directly reduce your adjusted net income for HICBC purposes.
Gift Aid donations (net paid)
Net charitable payments made under Gift Aid in the tax year, which are grossed up by 20% to reduce your adjusted net income.
CALCULATOR QUESTIONS
Child benefit tax questions
What is the new Child Benefit threshold in the UK?
From 6 April 2024, the lower threshold for the High Income Child Benefit Charge was increased to £60,000, and the upper threshold was increased to £80,000. You keep 100% of your benefit if your adjusted net income is £60,000 or less.
How is the HICBC taper calculated between £60,000 and £80,000?
The charge is 1% of the total Child Benefit received for every £200 of adjusted net income between £60,000 and £80,000. At £70,000, the charge is 50%; at £80,000 or above, the charge is 100%.
Does Child Benefit take into account combined household income?
Currently, HICBC is based solely on the individual income of the higher-earning partner, not combined household income. A couple each earning £59,000 (total £118,000) pays no charge, whereas a single-earner family on £65,000 pays a 25% charge.
How do I pay the High Income Child Benefit Charge?
If you are subject to the charge, you must register for Self Assessment and complete an annual tax return by 31 January following the end of the tax year to declare and pay the charge.
Why should I register for Child Benefit if I earn over £80,000?
Filling out the claim form ensures the stay-at-home parent receives National Insurance credits towards their State Pension and ensures your child automatically receives a National Insurance number before their 16th birthday. You can tick the box to opt out of payments to avoid paying the charge.