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 above the HICBC threshold 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 £80,000 to reduce the impact on affected families. The threshold is set by the government and is not uprated automatically, so check GOV.UK for the figure that applies to the tax year.
How Child Benefit Works
Child Benefit is a weekly payment made to a person responsible for raising a child. There is a higher rate for the eldest or only child and a lower rate for each additional child. The rates are uprated each April, and the current figures are published on GOV.UK.
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 the threshold
- 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 across a taper band that starts at the threshold:
| Adjusted net income | Percentage of Child Benefit clawed back |
|---|---|
| Up to the threshold | 0% — no charge |
| Within the taper band | 1% for every £200 above the threshold |
| Above the top of the taper band | 100% — full amount repaid |
Calculation Example
An illustrative family receives total Child Benefit of £2,400 per year, and the higher earner has income of £70,000. With a £60,000 threshold:
| Step | Calculation |
|---|---|
| Income above £60,000 | £10,000 |
| Number of £200 bands | 50 |
| Percentage clawed back | 50% |
| Child Benefit received | £2,400 |
| HICBC payable | £1,200 |
The family keeps roughly half of the Child Benefit in this scenario.
Paying the Charge
Since the 2025/26 tax year, an employee who does not need to send a tax return for another reason can register to pay HICBC through their PAYE tax code. Otherwise the charge is reported and paid through self-assessment. The charge still has to be reported using the appropriate route by the deadline.
Opting Out of Child Benefit
Families can choose to stop receiving Child Benefit payments to avoid having payments later clawed back. 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. In an illustrative case with a £60,000 threshold, 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. Your adjusted net income falls to £58,750, taking you below the 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 a much higher income than the HICBC range. However, families where the higher earner approaches that level 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. Unless you have chosen to pay it through your tax code, it does not 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)