High Income Child Benefit Charge 2026/27: How HICBC Works
HICBC explained for 2026/27: the £60,000 threshold, the £80,000 full clawback, how the charge is calculated, and how pension contributions can reduce your adjusted net income.
What is the High Income Child Benefit Charge?
Child Benefit is a universal payment available to most families with children under 16 (or under 20 in qualifying education or training). But when the higher earner in a household has income above £60,000, a tax charge -- the High Income Child Benefit Charge (HICBC) -- claws some or all of it back.
The HICBC was introduced in 2013 at a £50,000 threshold. In April 2024, the threshold was raised to £60,000, and the full clawback point increased from £60,000 to £80,000. This change removed around 700,000 families from HICBC entirely and reduced the charge for many others.
Child Benefit rates 2026/27
Child Benefit rates are uprated each April in line with CPI inflation. The confirmed 2026/27 rates are:
| Child | Weekly rate | Annual rate |
|---|---|---|
| Eldest or only child | £27.05 | £1,406.60 |
| Each additional child | £17.90 | £930.80 |
Example: a family with 2 children receives £27.05 + £17.90 = £44.95/week = £2,337.40/year.
(The 2025/26 rates were £26.05 and £17.25 respectively.)
How HICBC is calculated
For every £200 of adjusted net income above £60,000, you lose 1% of the total Child Benefit your household received in the tax year.
| Adjusted net income | Percentage clawed back |
|---|---|
| Below £60,000 | 0% |
| £62,000 | 10% |
| £65,000 | 25% |
| £70,000 | 50% |
| £75,000 | 75% |
| £80,000+ | 100% |
Formula
HICBC = (Adjusted net income - £60,000) / £200 x 1% x Annual Child Benefit received
(Maximum 100% of Child Benefit)
Worked examples
Example 1 -- Tom, income £64,000, 1 child
- Excess over £60,000: £4,000.
- Charge rate: £4,000 / £200 x 1% = 20%.
- Annual Child Benefit: £1,406.60.
- HICBC: £1,406.60 x 20% = £281.32.
Example 2 -- Rachel, income £72,000, 2 children
- Excess over £60,000: £12,000.
- Charge rate: £12,000 / £200 x 1% = 60%.
- Annual Child Benefit: £2,337.40.
- HICBC: £2,337.40 x 60% = £1,402.44.
Example 3 -- David, income £85,000, 3 children
- Excess over £60,000: £25,000 (above £20,000 cap).
- Charge rate: 100% (full clawback).
- Annual Child Benefit: £1,406.60 + £930.80 + £930.80 = £3,268.20.
- HICBC: £3,268.20 (the entire Child Benefit is clawed back).
What is adjusted net income?
Adjusted net income is not the same as your salary. It is your total taxable income from all sources, after certain deductions:
Starts with:
- Employment income (salary + bonuses + benefits in kind).
- Self-employment profits.
- Rental income.
- Savings interest (above Personal Savings Allowance).
- Dividends (above dividend allowance).
- Foreign income.
Minus:
- Pension contributions (personal contributions or net-pay salary sacrifice).
- Gift Aid donations (grossed up by dividing the donation by 0.8).
- Certain trading and property losses.
Before the personal allowance is applied.
This matters because pension contributions are a key lever to bring adjusted net income below £60,000.
Who pays HICBC -- the earner or the recipient?
The HICBC is a tax charge on the higher earner in the household, not the person receiving the Child Benefit.
This is counterintuitive and catches many couples out. The practical effect:
- Child Benefit is usually paid to the main carer (often the lower earner).
- The higher earner may never see the Child Benefit payments.
- But HMRC charges HICBC to the higher earner via Self Assessment.
Example: Sarah earns £75,000 and her partner Tom earns £20,000. Tom receives Child Benefit. Sarah never touches the Child Benefit money -- but she owes the HICBC and must file a Self Assessment return.
The threshold is per individual, not per household. This creates a well-known anomaly:
- Two partners each earning £59,000: joint income £118,000, HICBC = £0.
- One partner earns £80,000, the other £0: joint income £80,000, HICBC = 100% clawback.
The government consulted in 2024 on moving to a household income basis, but no legislation has followed as of mid-2026. Spring Budget 2026 confirmed no change.
How to pay HICBC
HICBC is not deducted through PAYE. You pay it through Self Assessment:
- If you are not already registered, register for Self Assessment by 5 October following the tax year in which you owed HICBC.
- File a Self Assessment return by 31 January the following year.
- Declare your income and the Child Benefit received by your household.
- HMRC calculates the HICBC and adds it to your January tax bill.
You cannot ask your employer to collect HICBC through your tax code for the current year (though HMRC may adjust your tax code in future years if you notified them of an ongoing liability).
If you fail to register for Self Assessment, HMRC will issue penalties and interest. The fact that you were unaware of the charge is not usually a valid defence.
Reducing HICBC: pension contributions
The most effective way to reduce or eliminate HICBC is to reduce your adjusted net income through pension contributions.
Salary sacrifice
Salary sacrifice pension contributions reduce your gross salary for PAYE purposes. They also reduce your adjusted net income for HICBC. This is the most efficient method.
Example: Alex earns £65,000. By sacrificing £5,001 into the workplace pension via salary sacrifice:
- New adjusted net income: £59,999.
- HICBC: £0.
- Savings: 25% of Child Benefit + income tax at 40% on the sacrifice + 2% NI on the sacrifice.
- Effective cost of the £5,001 contribution: around £2,750 (after tax/NI/HICBC savings).
Personal pension contributions
Contributions to a personal pension (SIPP or similar) made from take-home pay reduce adjusted net income when grossed up by the basic-rate relief. A £4,000 net contribution attracts £1,000 basic-rate relief and reduces adjusted net income by £5,000.
For higher-rate taxpayers, you claim the additional 20% relief through Self Assessment, further reducing the net cost.
Gift Aid donations
Gift Aid donations reduce adjusted net income. A £800 net donation = £1,000 gross = £1,000 reduction in adjusted net income. At the margin (e.g. income of £60,500), even a modest donation eliminates HICBC.
Should you opt out of Child Benefit?
If your adjusted net income is above £80,000, the full Child Benefit is clawed back. In this case, many households opt out of receiving Child Benefit payments to avoid:
- Receiving money they know they will owe back.
- The need to register for Self Assessment solely for HICBC.
How to opt out of payments:
Go to your Child Benefit claim on the HMRC website and elect to stop receiving payments. You retain the underlying Child Benefit claim.
Critical: never cancel the claim entirely. Keeping the claim (even without payments) provides:
- National Insurance credits for the non-earning or low-earning parent. Each year of credit counts toward the State Pension qualifying years (you need 35 for the full new State Pension).
- Automatic National Insurance number issued to the child at age 16.
If you cancelled the claim (rather than stopping payments), contact HMRC to reinstate it.
HICBC and Self Assessment: the taper zone
If your income fluctuates around £60,000 year to year, careful attention to adjusted net income can make a significant difference. Consider:
- Timing large pension contributions before 5 April.
- Deferring bonus payments where possible.
- Using Gift Aid strategically.
- Reviewing investment income -- dividends or savings interest above allowances count toward adjusted net income.
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Income tax calculatorSources
- HMRC: High Income Child Benefit Tax Charge
- HMRC: Adjusted net income
- HM Treasury: Spring Budget 2024 -- HICBC threshold change
- HMRC: Child Benefit rates
Frequently asked questions
What is the HICBC threshold in 2026/27?
HICBC starts at £60,000 of adjusted net income. It was raised from £50,000 to £60,000 in April 2024. Full clawback applies when income reaches £80,000.
How is HICBC calculated?
For every £200 of adjusted net income above £60,000, you lose 1% of the Child Benefit received. At £80,000 the full amount is clawed back. So at £70,000 (£10,000 above the threshold), the charge is 50% of Child Benefit received.
What are the Child Benefit rates in 2026/27?
Child Benefit rates are uprated annually. For 2026/27 the confirmed rate is £27.05 per week for the eldest or only child and £17.90 per week for each additional child, up from £26.05 and £17.25 in 2025/26.
Does HICBC apply to joint income or individual income?
HICBC is currently based on the highest individual earner's adjusted net income, not joint household income. This means two partners each earning £55,000 pay no HICBC, while one partner earning £80,000 (even if the other earns nothing) faces full clawback.
Can pension contributions reduce HICBC?
Yes. Pension contributions reduce your adjusted net income. Salary sacrifice contributions reduce gross pay directly. Personal pension contributions are deducted from adjusted net income. This is the most common way to reduce or eliminate HICBC.
Do I need to register for Self Assessment because of HICBC?
Yes. If your adjusted net income is between £60,000 and £80,000 and someone in your household receives Child Benefit, you must register for Self Assessment and declare the HICBC. Even if you are otherwise PAYE, this obligation applies.
Should I opt out of Child Benefit payments to avoid HICBC?
If your income is above £80,000 (full clawback), opting out of Child Benefit payments avoids HICBC and the Self Assessment requirement. But always claim Child Benefit in name only -- it protects NI credits for the lower-earning partner and ensures the child gets a National Insurance number at 16.
Is there a Scottish or Welsh version of Child Benefit?
Child Benefit is a reserved UK-wide benefit -- the same rates and HICBC rules apply in Scotland and Wales. Scotland has a separate Scottish Child Payment for families on low incomes, but this is different from Child Benefit.
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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.
The High Income Child Benefit Charge: 5 Worked Examples for 2026/27
Five detailed HICBC worked examples for 2026/27: the new £60k-£80k taper, salary sacrifice strategy, joint income scenarios, and the cliff edge at £80,000.
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