Comparison · Tax · 2026
Opt Out of Child Benefit vs Paying HICBC UK 2026: Which Is Better?
If the highest earner in your household earns above £60,000, you can either keep claiming Child Benefit and pay some or all of it back through Self Assessment, or opt out of the payments entirely. The right choice depends on income stability — and either way, the claim itself should stay active to protect State Pension National Insurance credits.
TL;DR - 30-Second Summary
- - Claim and pay HICBC back: best if income varies year to year or is only just above £60,000
- - Opt out of payments: avoids Self Assessment admin if income is reliably above £80,000 (100% clawback anyway)
- - Always keep the claim active — even if you opt out of payments — to protect National Insurance credits for State Pension
Side by Side: Opt Out vs Claim and Repay
| Feature | Opt Out of Payments | Claim and Repay via HICBC |
|---|---|---|
| Cash received | None | Full amount, minus the charge repaid later |
| Self Assessment required | No (if no other reason to file) | Yes, to declare and pay HICBC |
| National Insurance credits (if claim form submitted) | Protected | Protected |
| Best for income between £60,000-£80,000 | Loses partial benefit unnecessarily | Keeps the untaxed portion |
| Best for income reliably above £80,000 | Avoids unnecessary admin | Same net outcome, more paperwork |
Worked Example: Two Children, £70,000 Income
A household with two children is entitled to £1,406.6 a year for the first child and £930.8 a year for the second, totalling £2,337.4 a year. The higher earner has an adjusted net income of £70,000.
| Step | Value |
|---|---|
| Full annual Child Benefit (2 children) | £2,337.4 |
| Income above £60,000 threshold | £10,000 |
| HICBC clawback percentage (1% per £200) | 50% |
| Amount repaid via HICBC | £1,169 |
| Net Child Benefit kept | £1,168 |
At £70,000 income, the household is 50% of the way through the £20,000-wide taper, so it keeps £1,168 of the £2,337.4 Child Benefit after repaying the charge — meaning opting out entirely at this income level would mean giving up money the household is legally entitled to keep.
Opt Out of Child Benefit vs HICBC — Frequently Asked Questions
What is the High Income Child Benefit Charge?
The High Income Child Benefit Charge (HICBC) claws back Child Benefit from the household through Self Assessment if either partner's adjusted net income is above £60,000. The charge is 1% of the Child Benefit received for every £200 of income above the threshold, meaning it claws back 100% of the Child Benefit once income reaches £80,000.
Can I keep claiming Child Benefit and just pay the charge back?
Yes. You do not have to opt out of Child Benefit payments to avoid the HICBC — you can keep receiving the payments and then declare the charge on a Self Assessment tax return, effectively paying some or all of it back. For households where income fluctuates near the threshold, or where only one partner's income is close to the threshold, this keeps the option to receive the full amount in a lower-income year.
Why would I opt out of Child Benefit payments instead of paying the charge back?
The main reason is administrative — if your income is reliably above £80,000, the charge claws back 100% of the benefit anyway, so opting out of payments avoids receiving money you will have to declare and repay via Self Assessment (and avoids needing to file Self Assessment purely because of Child Benefit, if you have no other reason to do so).
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If I opt out of Child Benefit payments, do I lose National Insurance credits?
No — and this is the critical detail many people miss. You should still submit the Child Benefit claim form even if you opt out of receiving the payments, because the claim itself (not the payment) is what triggers National Insurance credits for the claimant, which protect your State Pension record if you are not working or earning below the NI threshold. Opting out of payments while keeping the claim active preserves these credits; simply never claiming at all does not.
Does the HICBC apply per household or per person?
The charge is based on the income of the higher earner in the household, not combined household income. So a household where one partner earns £90,000 and the other earns £10,000 faces the full 100% clawback (since the higher earner is above £80,000), while a household where each partner earns £55,000 (£110,000 combined) faces no charge at all, because neither individual is above the £60,000 threshold. This is a well-known quirk of how the charge is calculated.
What income counts toward the £60,000 threshold?
It is "adjusted net income" — broadly your total taxable income (salary, bonus, rental income, savings interest, dividends) minus Gift Aid donations and pension contributions made via relief-at-source or personal contributions (salary sacrifice pension contributions are excluded from income in the first place, so they reduce adjusted net income further). Increasing pension contributions is a common way for someone just above the threshold to bring their adjusted net income back under £60,000 and keep the full Child Benefit.
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Disclaimer: This is general information, not tax advice. Adjusted net income rules and the High Income Child Benefit Charge calculation can be complex — check your own circumstances against current HMRC guidance. See gov.uk guidance on the High Income Child Benefit Charge.
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