High Income Child Benefit Charge (HICBC) Explained — 2025/26

Quick answer

The High Income Child Benefit Charge (HICBC) is a tax that claws back Child Benefit from higher earners. For 2025/26:

You still receive the Child Benefit payments — the higher earner just pays a tax equal to part or all of it via Self Assessment.

About 300,000 households are affected by HICBC. From April 2024, when the threshold rose from £50,000 to £60,000, roughly 700,000 households were lifted out of HICBC entirely.

How the charge works

For each £200 of adjusted net income above £60,000, you lose 1% of the Child Benefit:

• £60,000 income: 0% clawback.
• £65,000: 25% clawback.
• £70,000: 50% clawback.
• £75,000: 75% clawback.
• £80,000+: 100% clawback.

What is "adjusted net income"?

It's your total taxable income, after deducting:

• Pension contributions you've made (or that came out of net pay).
• Gift Aid donations.
• Some trading losses.

But before the personal allowance is applied.

This is not your salary alone — it includes:

• Salary, bonuses, employment benefits.
• Self-employed profits.
• Rental income.
• Dividend and savings interest (above relevant allowances).
• Foreign income.
• Most other taxable income.

Child Benefit rates 2025/26

For reference, what's at stake:

• Eldest / only child: £26.05/week = £1,354.60/year.
• Each subsequent child: £17.25/week each = £897/year each.

So a family of 2 children: roughly £2,252/year of Child Benefit at risk above the £60k threshold.

Worked examples

Example 1 — Sarah, £55,000 salary, 2 children

• Adjusted net income: £55,000.
• HICBC: £0 (below threshold).
• Child Benefit received: £2,252.
• Net to family: £2,252.

Example 2 — Mark, £65,000 salary, 1 child

• Adjusted net income: £65,000.
• Excess over £60,000: £5,000.
• Clawback rate: £5,000 / £200 = 25%.
• Child Benefit received: £1,354.60.
• HICBC: £1,354.60 × 25% = £338.65.
• Net to family: £1,015.95.

Example 3 — Lisa, £75,000 salary, 2 children

• Adjusted net income: £75,000.
• Excess over £60,000: £15,000.
• Clawback rate: £15,000 / £200 = 75%.
• Child Benefit received: £2,252.
• HICBC: £2,252 × 75% = £1,689.
• Net to family: £563.

Example 4 — James, £85,000 salary, 3 children

• Adjusted net income: £85,000.
• Excess over £60,000: £25,000 → over £20,000 cap.
• Clawback rate: 100%.
• Child Benefit received: £1,354.60 + £897 + £897 = £3,148.60.
• HICBC: £3,148.60 (full clawback).
• Net to family: £0.

Why the higher earner pays — not the recipient

HICBC is a personal tax charge on the higher-earning partner, even though the Child Benefit usually goes to the lower-earning partner's bank account.

This catches many couples out:

• "But my husband never sees that money!" — HMRC doesn't care.
• "But she gets the money — why am I paying?" — that's how the legislation is drafted.

The higher earner has to register for Self Assessment specifically to declare HICBC, even if otherwise PAYE-only.

The threshold is per-individual, not per-household. So:

• Couple A: both earn £55,000 each. Joint income £110,000. HICBC: £0 (neither over £60k).
• Couple B: one earns £80,000, the other £30,000. Joint income £110,000. HICBC: 100% of Child Benefit clawed back.

Couple B is materially worse off. This anomaly was the basis for the long-standing campaign to switch HICBC to a household income basis — see "what's changing" below.

How to mitigate HICBC

The most powerful lever: reduce your adjusted net income to below £60,000.

1. Pension contributions

Salary-sacrifice pension contributions reduce both your gross salary (for PAYE) and your adjusted net income (for HICBC).

Example — James, £85,000, 3 children, sacrifices £25,000 into pension

• Adjusted net income drops from £85,000 to £60,000.
• HICBC: £0.
• Saves: £3,148.60 of HICBC + £10,500 income tax saved + £500 NI saved = £14,148.60.
• Of the £25,000 sacrificed, only £10,851.40 cost his take-home (£25,000 - tax/NI/HICBC saved).

For someone whose adjusted income just crosses £60,000, even a modest extra pension contribution can eliminate HICBC entirely. The effective marginal saving in the £60k–£80k band can exceed 60% once HICBC, income tax and NI combine.

2. Gift Aid donations

Gift Aid donations reduce your adjusted net income by the grossed-up amount (i.e. donation × 1.25). A £4,000 gift Aid donation reduces your income by £5,000.

Useful at the £60,000–£64,000 range — small donations make a big difference.

3. Loss reliefs

If you have a trading or property loss, claim it appropriately to reduce adjusted net income.

4. Bonus timing

If your bonus pushes you over £60,000, ask if you can:

• Defer it to next year.
• Take it as additional pension contribution.

What if you've already received the Child Benefit?

You don't pay HICBC monthly — it's a single annual charge through Self Assessment. So:

1. You receive Child Benefit payments throughout the tax year.
2. After the tax year ends (5 April), you file Self Assessment by 31 January.
3. HMRC calculates HICBC owed.
4. You pay it as part of your Self Assessment balance.

Don't spend the Child Benefit if you'll owe it back. Many higher earners ring-fence the money in a separate savings pot.

Should you opt out?

You have three options:

Option A — Receive payments + pay HICBC

Default. You get the money during the year, pay HICBC at year-end via Self Assessment.

Option B — Claim but opt out of payments

You complete the Child Benefit claim form but tick "I don't want to receive payment". You still get:

• NI credits for the parent at home (counts toward State Pension qualifying years).
• A National Insurance number automatically issued to your child at age 16.
• No HICBC to pay (since you didn't receive payments).

This is the recommended option for households where the higher earner is definitely above £80,000 (100% clawback) and the other parent isn't earning enough NI credits otherwise.

Option C — Don't claim at all

Don't do this. You lose the NI credits and the automatic NI number for your child. Many parents discover the credit gap only when they check their State Pension forecast decades later.

What's changing — household income reform

A 2024–25 consultation explored moving HICBC to a household income basis (combining both partners' incomes against a higher threshold, like £120,000).

Status as of mid-2026:

• Consultation closed 2024.
• No legislation drafted yet.
• OBR forecast assumes no change in the next 3 years.
• Spring Budget 2026 confirmed no change.

So the long-standing single-earner anomaly remains: couples with one big income lose Child Benefit, couples with two medium incomes don't.

Self Assessment for HICBC

If your adjusted net income is between £60,000 and £80,000 AND someone in your household receives Child Benefit, you must:

1. Register for Self Assessment (Part 2 of this series covers UTR / Gateway setup).
2. Declare your income.
3. Declare the Child Benefit received by your household.
4. HMRC calculates HICBC and adds it to your January tax bill.

If you're already filing Self Assessment for other reasons (self-employment, rental, etc.), it's an extra section on the same return.

Common errors

1. Not registering for Self Assessment when crossing £60,000. HMRC's late-registration penalty applies.
2. Forgetting that bonuses push adjusted net income up. A £5,000 bonus in March can trigger HICBC retroactively.
3. Calculating HICBC on gross salary instead of adjusted net income. Pension contributions matter.
4. One partner assumes the other is "handling it" when they're not. The higher earner is responsible.
5. Opting out completely instead of opting out of payments only.

Try the numbers

Sources

• HMRC: High Income Child Benefit Charge
• HMRC: Child Benefit tax: claim or opt out of Child Benefit payments
• HMRC: Claim Child Benefit
• HM Treasury: Spring Budget 2024 — HICBC threshold rise to £60,000
• HMRC consultation: HICBC reform on household-income basis (2024)