The Spring Budget has brought changes to the High Income Child Benefit Charge (HICBC), effective from 6 April 2024. The income level at which HICBC begins now starts at £60,000, up from £50,000.
HICBC now charges 1% of the full Child Benefit for every £200 of the highest earner’s income between £60,000 and £80,000. Above £80,000, the charge equals the Child Benefit amount. Thus, HICBC can reduce or eliminate the benefit’s financial advantage.
About 485,000 families should benefit from the higher HICBC threshold. The government plans to apply HICBC to households, not individuals, by April 2026. This could change after the general election.
For Child Benefit claims after 6 April 2024, backdated payments will count as 2024-25 income to avoid a HICBC charge for 2023-24.
If HICBC affects you or your partner, keep claiming Child Benefit. It secures other benefits and your child’s National Insurance number. You can choose to receive Child Benefit and pay the tax or opt out and avoid the charge.
Flexibility in Financial Planning
The HICBC update raises the income threshold, benefiting many families. Remember, claiming Child Benefit can protect other entitlements and ensure your child gets their National Insurance number. The choice to receive the benefit and face the tax, or to opt-out, is yours. This flexibility helps you manage your finances better.
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