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High-Income Child Benefit Charge

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In an effort to reduce unfairness, during the Spring Budget on 6 March 2024, Chancellor Jeremy Hunt announced the thresholds for the High-Income Child Benefit Charge (HICBC) will be increased from 6 April 2024.  This will affect any higher rate earner who is entitled to claim Child Benefit.  Anyone who is entitled to claim Child Benefit but has opted out please read the call to action below.

 

You may have to pay the HICBC if you are considered to have ‘high income’ and Child Benefit is being paid in relation to a child that lives with you, regardless of whether you are a parent of that child.  If you are living with another person in a marriage, civil-partnership or long-term relationship, you will only be liable to HICBC if you are the highest earner.

 

Currently, the HICBC is charged at 1% of the Child Benefit received for every £100 of income earned above £50,000, so once a taxpayer earns more than £60,000 the Child Benefit will be fully clawed back. 

 

From 6 April 2024, the HICBC will be calculated at 1% of the Child Benefit received for every £200 of income earned above £60,000.  This now means that Child Benefit is only fully clawed back when income exceeds £80,000, rather than £60,000 as is currently the case.

 

The HICBC does not apply if the Child Benefit claimant opts out from receiving the payments.

 

The Chancellor also announced plans to administer the HICBC based on total household income, rather than the income of the highest earner in the household, by April 2026.

 

Call To Action

If your household is entitled to claim Child Benefit but you have opted out due to your income being consistently above £60,000, you should reassess your situation as the full clawback threshold increases to £80,000 from 6 April 2024.

 

Claimants are only entitled to back date a claim 3 months. If you entitled to Child Benefit, are not currently claiming it, and have income below £80,000 we recommend restarting your Child Benefit payments as soon as possible.

 

You can find information about the High-Income Child Benefit Charge at High Income Child Benefit Charge: Overview - GOV.UK (www.gov.uk) including how to restart your child benefit payments.  Please note: this has not been updated for the 2024/25 tax year changes noted above.

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