The High Income Child Benefit Charge

Thresholds

From 2024 to 2025

Charge starts at adjusted net income over £60,000 (GOV.UK)

Rate

1% of the Child Benefit for every £200 over £60,000

Full charge

Adjusted net income over £80,000

2023 to 2024 and earlier

Over £50,000, at 1% for every £100

Who pays

The charge applies where the client or their partner gets Child Benefit and at least one of them has adjusted net income over the threshold. GOV.UK says it also applies where someone else gets Child Benefit for a child living with the client and the client contributes at least an equal amount towards the child's upkeep. Where both partners are over the threshold, the one with the higher income pays.

A partner is someone the client is married to, in a civil partnership with or living with as if they were, and from whom they are not permanently separated.

Adjusted net income

GOV.UK describes adjusted net income as total taxable income, including savings interest and dividends, before personal allowances and less certain reliefs such as pension contributions and Gift Aid. A pension contribution or Gift Aid donation can bring a client's adjusted net income below £60,000 or reduce the charge.

Worked example

For example, a client receives Child Benefit of £2,000 for the year and has adjusted net income of £70,000. Applying the GOV.UK rule, the income is £10,000 over £60,000, which is 50 steps of £200. The charge is 50% of the Child Benefit, which is £1,000. At £80,000 or more the charge would be the full £2,000. With adjusted net income of £65,000 the charge would be 25 steps of £200, which is 25% of the Child Benefit, or £500.

GOV.UK has an online Child Benefit tax calculator for estimating the charge.

Paying the charge

1. Through PAYE

   An employee can use HMRC's pay the tax charge through PAYE service if they do not need a tax return for another reason, are paying for the current or previous tax year onwards, and it is on or before 31 January after the tax year. The service needs the client's and any partner's adjusted net income, the partner's National Insurance number and the dates of the relationship. HMRC then sends new tax codes to the client, their employer and any pension provider.

2. Through Self Assessment

   GOV.UK says the client must use Self Assessment if they file a return for another reason, or if it is later than 31 January after the tax year concerned.

3. Registering

   A client paying through Self Assessment for the first time registers by 5 October after the tax year, as the registration page sets out.

Opting out of Child Benefit payments

A family can stop Child Benefit payments to avoid the charge. GOV.UK says this can be done through an online service, an online form, or by contacting the Child Benefit Office. Keeping the claim in place while not taking payments keeps National Insurance credits that count towards the State Pension, and the child gets a National Insurance number shortly before turning 16 without applying.

The client still pays any charge owed for each tax year up to the date payments stop, and must still report changes in family life that affect entitlement. Payments cannot be stopped while they are being used to repay an overpayment or benefits from another country.

Questions