How does the High Income Child Benefit Charge work after the 2024 Budget changes?

Full answer

The High Income Child Benefit Charge (HICBC) is a tax charge that claws back Child Benefit when one person in the household earns above a threshold. The 2024 Spring Budget raised both thresholds significantly. New thresholds from 2024/25 The charge now starts at adjusted net income of GBP 60,000 (previously GBP 50,000). It increases by 1% of the Child Benefit amount for every GBP 200 of income above GBP 60,000. At GBP 80,000 and above the charge equals 100% of the benefit -- meaning no net Child Benefit is retained. How the charge is calculated If the highest earner has adjusted net income of GBP 70,000, they are GBP 10,000 above the threshold. Dividing GBP 10,000 by GBP 200 gives 50, so the charge equals 50% of the Child Benefit received that year. For a family with two children, annual Child Benefit in 2026/27 is approximately GBP 2,780 (GBP 1,354 for eldest + GBP 1,430 for second child -- check the current DWP rate as it uprates each April). A 50% charge would mean repaying around GBP 1,390 via Self Assessment. Who is the "highest earner" The charge falls on the individual in the household with the higher adjusted net income -- not necessarily the Child Benefit claimant. Both partners must consider their own income. Adjusted net income means gross income minus pension contributions and Gift Aid donations. Household-based assessment (future plan) The government announced an intention to move to a household-income basis rather than an individual basis, but this requires significant HMRC systems work and has not yet been legislated for 2026/27. The charge remains individual-based for now. Paying the charge The HICBC is collected through Self Assessment. If you are not already registered, you must register and file a tax return to pay it. Alternatively, you or your partner can opt out of receiving Child Benefit to avoid the admin -- but it is still worth registering for Child Benefit (even at GBP 0 payment) to protect National Insurance credits. Practical tip Increasing pension contributions reduces adjusted net income and can push income below GBP 60,000, eliminating the charge entirely. For example, if your salary is GBP 65,000, contributing GBP 5,001 to a pension through salary sacrifice reduces adjusted net income to just below the threshold.

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