Child Benefit and the High Income Child Benefit Charge

The High Income Child Benefit Charge (HICBC) applies in specific circumstances. Firstly, it affects individuals or partners who receive Child Benefit. Additionally, it kicks in when adjusted net income exceeds £60,000. Furthermore, the charge may apply when another person claims Child Benefit for a child living with you. In such cases, you must contribute at least an equal amount towards the child’s upkeep. Notably, this rule applies regardless of whether the child is your own.

What counts as adjusted net income?

Adjusted net income includes your total taxable income. Consequently, this covers earnings, savings interest and dividends. Moreover, HMRC calculates this figure before applying the Personal Allowance. However, deductions such as pension contributions and Gift Aid reduce the total.

How the charge works in 2026-27

For the current 2026-27 tax year, specific thresholds determine the charge. Firstly, if income falls between £60,000 and £80,000, a set formula applies. Specifically, you pay 1% of the total Child Benefit received for every £200 of income above £60,000. However, once income reaches £80,000 or more, the charge equals the full Child Benefit received.

Which partner pays?

Where both partners earn above the threshold, one straightforward rule applies. Namely, the partner with the higher adjusted net income pays the charge.

Your options as a taxpayer

Taxpayers face a clear choice regarding Child Benefit and the High Income Child Benefit Charge. On one hand, you can continue receiving payments and settle the charge. Alternatively, you can opt out of payments while remaining registered.

Importantly, opting out preserves several key advantages:

• Your underlying entitlement stays intact.
• National Insurance credits continue to build.
• These credits help you qualify for the State Pension.
• Your child automatically receives a National Insurance number at age 16.

Paying the charge

You can pay the charge through PAYE or self-assessment. However, self-assessment becomes mandatory in certain situations. For example, you must file a return if you already do so for other reasons. Similarly, self-assessment applies when you pay after 31 January following the end of the tax year.

Can we help?

If you would like tailored advice, our tax specialists are ready to help. So, contact Ecovis Wingrave Yeats today to discuss your circumstances. Ultimately, we can help you meet your obligations quickly and confidently.