Paying the High Income Child Benefit Charge Through Your Tax Code Instead of Self Assessment
Since 2025, employed taxpayers can opt to pay the High Income Child Benefit Charge through PAYE via a tax code adjustment, instead of registering for Self Assessment. How the option works and who it suits.
The administrative problem HICBC created
The High Income Child Benefit Charge has long been criticised not just for its cliff-edge design around the threshold, but for the sheer administrative hassle it created: anyone liable had to register for Self Assessment specifically to declare and pay it, even if they were otherwise a straightforward PAYE employee who had never needed to file a tax return in their life. This brought hundreds of thousands of higher earners into the Self Assessment system purely because of Child Benefit, with all the deadlines, record-keeping, and (for some) confusion that comes with it.
How HICBC works: a quick recap
| Threshold (2026/27) | Effect |
|---|---|
| Below £60,000 | No HICBC — full Child Benefit retained |
| £60,000–£80,000 | Charge of 1% of Child Benefit received per £200 of income above £60,000 |
| £80,000 and above | Charge equals 100% of Child Benefit received — effectively fully clawed back |
Crucially, this is based on the higher individual earner's adjusted net income in the household, not combined household income — a detail that catches out some dual-earner couples who assume their combined income is what matters.
High Income Child Benefit Charge Calculator
Calculate how much Child Benefit you keep after the High Income Child Benefit Charge based on your adjusted net income.
Open HICBC Calculator calculatorThe new PAYE option
Employed taxpayers liable for HICBC can now choose to have the charge collected directly through their PAYE tax code, rather than registering for and completing Self Assessment purely for this purpose. HMRC adjusts the tax code so the equivalent amount is collected gradually through the year via payroll, in a similar way to how underpayments from other sources can be collected through a tax code adjustment.
Who this suits
Good candidates for the PAYE option:
- Employees with no other reason to file Self Assessment — for example, no self-employment income, no significant untaxed savings or investment income, no rental income requiring a return.
- Anyone who has found the Self Assessment registration, record-keeping, and annual deadline process disproportionately burdensome purely for the purpose of declaring HICBC.
Might prefer to stay with Self Assessment:
- Anyone already required to file a Self Assessment return for other reasons (self-employment, rental income, other untaxed income) — for these taxpayers, adding the HICBC declaration to an existing return may be simpler than managing it through a separate PAYE mechanism.
- Anyone who prefers to see and control the exact calculation directly on a return, rather than via a tax code adjustment that estimates the charge across the year.
You still have to tell HMRC — this isn't automatic
A common misunderstanding is that opting for the PAYE mechanism removes the need to notify HMRC about the Child Benefit claim and relevant income position. It doesn't — you (or your partner, whichever of you is the Child Benefit claimant) still need to make HMRC aware of the situation so the correct charge can be worked out and applied, whichever collection method is used. The PAYE option changes how the charge is paid, not whether HMRC needs to know about it in the first place.
The alternative: not receiving Child Benefit at all
Some higher earners, particularly those confident their income will remain well above the upper threshold, choose to submit the Child Benefit claim form but elect not to actually receive the payments. This avoids the HICBC calculation entirely (since there's no payment to claw back) while still protecting the claimant's National Insurance credits — an important detail for anyone not otherwise building National Insurance contributions through employment — and ensuring the child is automatically issued a National Insurance number ahead of their 16th birthday.
Practical steps
- Check your (and your partner's) individual adjusted net income against the £60,000/£80,000 thresholds — remember it's the higher individual income that matters, not combined household income.
- Decide whether the PAYE tax code option or Self Assessment suits you better, based on whether you already have another reason to file a return.
- Notify HMRC of the Child Benefit claim and relevant income position regardless of which payment mechanism you choose — this step isn't optional either way.
- Consider claiming but not receiving Child Benefit if you're confident your income will remain well above the upper threshold and want to avoid the HICBC process altogether while still protecting National Insurance credits and your child's National Insurance number.
Frequently asked questions
What is the High Income Child Benefit Charge?
The High Income Child Benefit Charge (HICBC) is a tax charge that claws back Child Benefit where the higher earner in a household (or their partner) has adjusted net income above the HICBC lower threshold. It's charged at 1% of the Child Benefit received for every £200 of income above the threshold, fully clawing back the benefit once income reaches the upper threshold, for 2026/27 the lower threshold is £60,000 and the upper threshold is £80,000.
How was HICBC traditionally paid before this option existed?
Traditionally, anyone liable for HICBC needed to register for and complete a Self Assessment tax return each year specifically to declare and pay the charge, even if they had no other reason to file a return — a significant administrative burden for many higher earners who were otherwise taxed entirely through PAYE and had never needed to deal with Self Assessment.
How does the PAYE tax code option work?
Since this option became available, employed taxpayers liable for HICBC can choose to have the charge collected directly through an adjustment to their PAYE tax code, rather than registering for Self Assessment — HMRC adjusts the tax code to collect the equivalent charge through the year via payroll, avoiding the need for a separate return purely for this purpose.
Is using the PAYE option compulsory?
No — it's an option, not a requirement. Taxpayers who are already required to complete Self Assessment for other reasons (for example, self-employment income, or other untaxed income) may find it simpler to continue declaring HICBC through their existing return, while those with no other Self Assessment requirement may prefer the PAYE option to avoid registering at all.
Does using the PAYE option mean I don't need to tell HMRC about my Child Benefit at all?
No — you (or your partner, whoever is the Child Benefit claimant) still need to make HMRC aware of the Child Benefit claim and household income position so the correct charge can be calculated and applied, whether that's through Self Assessment or through the PAYE tax code adjustment process; it simply changes the mechanism of payment, not the underlying obligation to declare the situation.
Does the £60,000/£80,000 threshold apply to household income or individual income?
It applies to the individual income of the higher earner in the household, not combined household income — meaning two earners each earning £55,000 (combined £110,000) would not trigger HICBC, while a single earner on £70,000 with a non-earning partner would, since the test looks at the highest individual adjusted net income in the household, not the total.
Can I choose to opt not to receive Child Benefit instead of paying the charge back?
Yes — you can elect not to receive Child Benefit payments at all while still submitting the claim form (which is important for protecting National Insurance credits and your child's own National Insurance number), avoiding the HICBC calculation entirely since you're not receiving payments to claw back in the first place.
Which option is better — Self Assessment or the PAYE tax code adjustment?
This depends on individual circumstances — the PAYE option avoids Self Assessment registration and its associated administrative burden and deadlines for those who'd otherwise have no other reason to file a return, while those already required to file for other reasons may find it simpler to keep everything on one return rather than splitting the charge into a separate PAYE mechanism.
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In-depth guides
Related reading
HICBC 2026/27: Why Some Higher Earners Should Opt Back Into Child Benefit
How the High Income Child Benefit Charge works in 2026/27, why some families who opted out should reconsider, and how the charge can now be collected through PAYE instead of Self Assessment.
HICBC Real-Time PAYE Collection 2026: Pay the Child Benefit Charge Without Self Assessment
HMRC now lets some parents pay the High Income Child Benefit Charge through their PAYE tax code in real time, instead of only via Self Assessment. Who can use it and how it works.
UK Self Assessment From Scratch — Part 3: Declaring Every Type of Income
Part 3 of our Self Assessment series — how to declare employment, self-employed, dividend, rental, foreign, savings, crypto and CGT income on your UK tax return. With the boxes to fill, evidence to keep, and common errors.