Pillar Guide · Updated June 2026
High Income Child Benefit Charge (HICBC) Explained 2026/27
The High Income Child Benefit Charge is a tax that gradually claws back Child Benefit once you or your partner earns above £60,000. Since April 2024 the threshold has been higher — up from £50,000 — and the taper now runs all the way to £80,000, so a much wider band of families is affected. This guide explains exactly how the charge is worked out, what “adjusted net income” really means, how pension contributions and Gift Aid can reduce or eliminate it, whether you should keep claiming for the valuable National Insurance credits, how to opt out, and the Self Assessment obligations that come with it.
What Is the High Income Child Benefit Charge?
Child Benefit is paid to anyone responsible for a child, regardless of income. The HICBC, introduced in January 2013, is a separate income tax charge that effectively recovers some or all of that Child Benefit from higher earners. It does not stop the benefit being paid — instead it adds a charge to the tax bill of the higher-earning partner.
The result is a slightly awkward two-step system: the benefit is paid out by the Child Benefit office, and then a portion is recovered through the tax system. For families well above £80,000 the two cancel out entirely, which is why so many opt out of receiving payments altogether.
The £60,000 Threshold — Raised from £50,000 in April 2024
From the introduction of the charge in 2013 until April 2024, the threshold was frozen at £50,000, dragging more families into the charge each year through wage inflation. In the Spring Budget 2024 the threshold was raised to £60,000 from 6 April 2024, and the top of the taper moved from £60,000 to £80,000.
| Period | Lower threshold | Full clawback at | Taper rate |
|---|---|---|---|
| 2013–April 2024 | £50,000 | £60,000 | 1% per £100 |
| April 2024 onwards | £60,000 | £80,000 | 1% per £200 |
The change took an estimated several hundred thousand families out of the charge entirely and softened it for many more. If you stopped claiming Child Benefit under the old £50,000 rules but now earn between £60,000 and £80,000, it may well be worth restarting a claim — you will keep at least part of the benefit.
The Taper: 1% of Child Benefit per £200 Over £60,000
Between £60,000 and £80,000 of adjusted net income, the charge increases gradually. The formula is 1% of the total Child Benefit received for each £200 of income above £60,000. At £80,000 and above, the charge equals 100% of the Child Benefit.
| Adjusted net income | % of Child Benefit charged | Charge on £1,354 (1 child) |
|---|---|---|
| £60,000 or below | 0% | £0 |
| £64,000 | 20% | ~£270 |
| £70,000 | 50% | ~£677 |
| £76,000 | 80% | ~£1,083 |
| £80,000 or above | 100% | ~£1,354 |
Use the Child Benefit calculator to work out your exact charge based on the number of children and your income.
Adjusted Net Income — The Figure That Matters
HICBC is based on adjusted net income, not gross salary. This distinction is crucial and frequently misunderstood. Adjusted net income is your total taxable income from all sources, minus certain deductions:
- Add up: salary and benefits in kind, self-employment profit, rental income, dividends, savings interest, taxable pensions and other taxable income.
- Deduct: gross personal pension contributions (including the basic-rate relief grossed up), and Gift Aid donations grossed up.
Pension contributions made through salary sacrifice or a net-pay workplace scheme already reduce your taxable pay, so they lower the figure directly. Relief-at-source pension contributions (most SIPPs and personal pensions) are deducted in the adjusted net income calculation. Either way, pensions are the key lever.
Because dividends, rental profit and savings interest all count, a director or landlord can be caught even on a modest salary. Check the full picture with the income tax calculator before assuming you are below the threshold.
How to Reduce the Charge
Because the charge keys off adjusted net income, anything that legitimately reduces that figure reduces or removes the charge:
- Pension contributions: the most powerful tool. A gross pension contribution equal to the excess over £60,000 eliminates the charge. For someone on £65,000 with one child, a £5,000 contribution removes the ~£677 charge and gets pension tax relief — an exceptional combined return on the contribution.
- Gift Aid donations: grossed-up charitable donations reduce adjusted net income in the same way.
- Salary sacrifice: sacrificing salary for pension, the cycle-to-work scheme, or additional employer pension contributions reduces taxable pay before it ever reaches your adjusted net income.
- Timing income: deferring a bonus or dividend into a year when you expect lower income can keep you under £60,000.
The effective tax saving in the taper zone can be remarkable. Between £60,000 and £80,000 a higher-rate taxpayer already faces 40% income tax plus the HICBC clawback, so the marginal rate on that band can exceed 60% for a two-child family — making pension contributions there extraordinarily efficient.
Should You Still Claim Child Benefit?
Even if the charge will recover the full amount, there are strong reasons to keep the claim registered:
- National Insurance credits: the parent who claims and is not working (or earns below the NI threshold) receives Class 3 NI credits towards their State Pension until the youngest child turns 12. Missing these can create gaps in the State Pension record that are expensive or impossible to fill later.
- The child's NI number: claiming Child Benefit automatically triggers the issue of a National Insurance number to the child shortly before they turn 16.
The recommended approach for high earners is to claim but not receive — submit the claim form to secure the NI credits and NI number, but elect not to receive the payments so there is no charge and no need to file Self Assessment purely for HICBC.
Opting Out of Payments
You can opt out of receiving Child Benefit payments through your HMRC online account or by contacting the Child Benefit office. The key point is to opt out of the payment while keeping the claim alive for the NI credits.
You can opt back in at any time — for example if your income falls below £60,000, or if you take a career break. Restarting payments is straightforward, and you can usually backdate a restart by up to three months.
The Self Assessment Requirement
If you receive Child Benefit and your adjusted net income exceeds £60,000, you must currently register for Self Assessment and declare the charge — even if you are otherwise taxed entirely through PAYE and have never filed a return. The deadline to register is 5 October following the end of the tax year in which the charge first arises, and the return and payment are due by the following 31 January.
HMRC has been rolling out a service to let employees pay the charge through their PAYE tax code without filing a full return. Until you are confirmed onto that route, assume you need to register for Self Assessment if you are caught by the charge. Failing to register and pay on time can lead to penalties and interest.
Household-Income Consultation Status
The biggest criticism of HICBC is that it is based on the highest individual income, not combined household income. A single earner on £80,000 loses all their Child Benefit, while a couple each earning £59,000 — £118,000 between them — pays nothing.
The previous government announced an intention to move to a household-income basis from April 2026 and consulted on it. However, in the Autumn Budget 2024 the current government confirmed it would not proceedwith the household-income reform, citing the cost and complexity of linking partners' incomes. For 2026/27, therefore, the charge remains based on the highest individual income. This may be revisited at a future fiscal event, so it is worth keeping an eye on Budget announcements.