The High Income Child Benefit Charge Explained

Child Benefit is a regular payment made to anyone responsible for raising a child under 16 (or under 20 if they stay in approved education). However, if you or your partner have a high income, you may have to pay some or all of it back through the High Income Child Benefit Charge (HICBC).

The New Thresholds for 2025/2026

In recent years, the government significantly changed the thresholds for the HICBC. For the 2025/2026 tax year, the rules are:

• If you and your partner each have an 'adjusted net income' of under £60,000, you keep all your Child Benefit.
• If either you or your partner has an adjusted net income between £60,000 and £80,000, you will have to pay back a portion of the Child Benefit as a tax charge.
• If either you or your partner has an adjusted net income of over £80,000, the tax charge is equal to 100% of the Child Benefit. Effectively, you receive no financial benefit.

How the Charge is Calculated

If your income is between £60,000 and £80,000, the charge is 1% of your family's Child Benefit for every £200 of income you have over £60,000.

Important Note: The charge applies to the highest earner in the household, regardless of who actually receives the Child Benefit payments into their bank account.

What is 'Adjusted Net Income'?

Your adjusted net income is your total taxable income before any Personal Allowances, minus certain tax reliefs. This includes:

• Your salary
• Profits from self-employment
• Rental income
• Interest and dividends

You can deduct things like pension contributions and Gift Aid donations to calculate your final adjusted net income. Making additional pension contributions is a common strategy to bring your income below the £60,000 threshold and avoid the charge.

How to Pay the Charge

If you are liable for the HICBC, you must declare it. You do this by registering for Self Assessment and filling in a tax return each year. HMRC will then calculate what you owe.

Alternatively, if you know your income will be over £80,000, you can choose to opt out of receiving Child Benefit payments altogether. However, you should still fill in the Child Benefit claim form, but tick the box to say you don't want to receive payments. This ensures the non-working parent still receives National Insurance credits towards their State Pension.