High Income Child Benefit Charge (HICBC) 2026: New Rules After April 2024

Child Benefit in 2026/27

Child benefit remains one of the most widely claimed universal benefits in the UK. For 2026/27, the weekly rates are:

• £26.05 per week for the eldest or only child
• £17.25 per week for each additional child

A family with two children therefore receives £43.30 per week, or roughly £2,251 per year. A family with three children receives £60.55 per week — more than £3,148 per year. These are meaningful sums, and the question of whether you can keep them — or whether the High Income Child Benefit Charge will reclaim them — is one that affects a growing number of families as earnings rise.

The High Income Child Benefit Charge (HICBC) was introduced in January 2013, initially applying when either member of a couple earned more than £50,000. For years it attracted controversy: it penalised single-earner couples where one partner earned just over the threshold while dual-income couples could each earn just under it and receive full child benefit. The threshold was not increased to reflect wage growth for over a decade. By the early 2020s, a threshold designed to affect the wealthiest 15% of households was catching far more families than intended.

What Changed in April 2024

The Spring Budget 2024 brought the most significant reform to HICBC since its introduction. From 6 April 2024:

• The threshold at which the charge begins rose from £50,000 to £60,000.
• The point at which the charge reaches 100% (full repayment) rose from £60,000 to £80,000.
• The taper band doubled — meaning the charge now phases in more gradually over a £20,000 range rather than £10,000.

For 2026/27, these new thresholds remain unchanged. No further adjustments were made in the Autumn Budget 2024 or the Spring Statement 2025.

How the New Taper Works

The charge is calculated as 1% of the child benefit received for every £200 of adjusted net income above £60,000. This means:

• At exactly £60,000 ANI — no charge, full child benefit retained.
• At £61,000 ANI — the charge is 5% of the annual child benefit amount (because £1,000 / £200 = 5 percentage points).
• At £70,000 ANI — the charge is 50% of the child benefit, so you effectively keep half.
• At £80,000 ANI or above — the charge equals 100%, meaning you repay all of the child benefit received.

The table below shows the effective child benefit retained across a range of income levels for families with one, two and three children.

Note: at £70,000 the charge reaches exactly 50 percentage points — but at £70,000 for one-child or multi-child families, not every family reaches zero at the same income because the charge is capped at 100%. The charge cannot exceed the total child benefit received, so once ANI reaches £80,000 you are simply repaying all of it.

What Is Adjusted Net Income?

Adjusted net income (ANI) is not the same as your gross salary. It is calculated as your total income from all sources (employment, self-employment, rental income, savings interest, dividends) minus certain deductions. The main deductions that reduce ANI are:

• Pension contributions paid to a registered pension scheme outside salary sacrifice (these are grossed up at the basic rate for the purposes of ANI calculation)
• Salary sacrifice pension contributions — these reduce your gross pay before PAYE is calculated, which automatically lowers your ANI
• Gift Aid donations — the grossed-up value of donations made through Gift Aid reduces ANI
• Trading losses carried forward or set against other income
• Payments to qualifying loan interest in some circumstances

It is your ANI, not your payslip gross, that determines whether and how much HICBC you owe.

The Salary Sacrifice Strategy

For employees whose income sits between £60,000 and £80,000, salary sacrifice pension contributions offer a particularly effective route to reducing or eliminating the HICBC. When you make contributions through salary sacrifice, your contractual pay is reduced before your employer calculates PAYE. This means:

1. Your income tax is lower (because your taxable pay is lower).
2. Your National Insurance contributions are lower.
3. Your employer's National Insurance is lower (and many employers pass some or all of this saving back to you as enhanced contributions).
4. Your ANI for HICBC purposes is lower.

Consider someone earning £68,000 gross with two children. They would ordinarily face an HICBC charge of 40% of their annual child benefit (£68,000 minus £60,000 = £8,000; divide by £200 = 40 percentage points). Their annual child benefit for two children is approximately £2,251. The charge would therefore be around £900 per year. If they increase their salary sacrifice pension contributions by £8,001, their ANI falls to just below £60,000, the charge disappears, and they retain the full £2,251 — while also benefiting from tax relief and NI savings on the additional pension contribution.

This kind of calculation is worth doing carefully with a pension and tax calculator before making changes to your contributions.

Self Assessment and the Coming PAYE Change

Under the current rules, if your income exceeds £60,000 and you or your partner is receiving child benefit, the higher earner must register for Self Assessment and complete a tax return each year to declare and pay the HICBC. This has been a source of frustration for many employees who have no other reason to file a return.

HMRC announced that it would introduce PAYE collection of HICBC for straightforward cases, removing the need for a Self Assessment return for employees whose tax affairs are uncomplicated. This change began being phased in during 2025 and is continuing into 2026. If your only reason for filing a Self Assessment return is HICBC, you should check HMRC's guidance for the current tax year to confirm whether you still need to file or whether your charge will be collected through PAYE instead.

If HMRC has the correct information — your income, your partner's income, the number of children — it can calculate the charge and adjust your tax code accordingly. However, if your income fluctuates significantly or you have other sources of income, you may still be required to self-assess.

Couples: It Is the Individual, Not the Household

One of the most frequently misunderstood aspects of HICBC is that it is assessed on the individual with the higher adjusted net income, not on the combined household income. This means:

• A couple where one earns £75,000 and the other earns £20,000 will face the full HICBC charge on the higher earner's income.
• A couple where both earn £59,999 will face no HICBC charge at all, even though their combined household income is nearly £120,000.

This asymmetry in the rules has been widely criticised as unfair to single-earner families, and there have been calls to move to a household-income basis. However, as of 2026/27, the individual-income basis remains in force. If you are part of a couple, check which partner has the higher ANI — it is that partner who must register for Self Assessment and pay any charge due.

Multiple Children and the Effective Taper Band

Having more children does not change the income levels at which the charge starts and ends — those thresholds remain £60,000 and £80,000 regardless of family size. However, because the annual child benefit is higher for larger families, the financial stakes are higher.

For a family with three children receiving approximately £3,149 per year in child benefit, the effective reduction in benefit for every £1,000 of income above £60,000 is around £157. For a family with one child, the equivalent figure is about £68. This means that for larger families, every pound of ANI reduction through pension contributions or Gift Aid is worth more in terms of HICBC saved.

Should You Claim Even If You Expect to Repay It?

The answer is almost always yes, and there are two main reasons.

First, National Insurance credits. Child benefit entitles the claimant to Class 3 National Insurance credits, which count towards their state pension entitlement. These credits are particularly valuable for a partner who is not working or working only part-time and who is not otherwise accumulating NI contributions. If you do not claim child benefit, you do not receive these credits. You can opt out of receiving the payment itself (to avoid the charge) while still claiming the entitlement — a little-known option that HMRC allows.

Second, income can fall. If your income drops below £60,000 in a future year — due to redundancy, reduced hours, a career break or retirement — you would want to be in the system already and receiving the payments you are entitled to. Retrospectively reclaiming is more complicated than simply maintaining your claim.

The interaction between child benefit, the HICBC and salary sacrifice is one of the more nuanced areas of personal finance planning for families in the higher earnings band. Getting it right — or at least understanding your position — can make a genuine difference to your household finances every year.