What is the HICBC threshold for 2025/26?

Full answer

HICBC is a tax charge — not a benefit reduction — designed to claw back Child Benefit from higher-income households. For 2025/26: 1% of Child Benefit is recovered for every £200 of adjusted net income above £60,000, hitting 100% at £80,000. "Highest earner" is whichever adult in the household has the larger adjusted net income — not necessarily the named claimant. Adjusted net income = total taxable income minus gross pension contributions, gross Gift Aid and (if claimed) trading allowance. Worked example: two children, Child Benefit £2,251.60/year. Earner has £72,000 adjusted net income. Excess £12,000 / £200 = 60% clawback = £1,350.96. Reduce earnings via £12,000 pension contribution: adjusted income £60,000, no HICBC, family keeps the entire £2,251.60 and gets up to 40% tax relief on pension. From April 2026 HICBC moves from Self Assessment to PAYE — HMRC will collect via tax code, ending the need for many parents to file returns. Couples on benefits-based Child Benefit who fall outside Self Assessment must register if HICBC applies, otherwise penalties accrue. The "household" test means a higher-earning new partner moving in mid-year can suddenly trigger HICBC — only the part of the year they are present counts.

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More answers

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