15 things you should know about the High Income Child Benefit Charge

It was then Chancellor George Osborne who introduced the High Income Child Benefit Charge (HICBC) in January 2013, after initially planning to withdraw Child Benefit entitlement altogether for higher-rate Income Tax payers. Now more than 10…

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Last Updated: 3rd March 2023

It was then Chancellor George Osborne who introduced the High Income Child Benefit Charge (HICBC) in January 2013, after initially planning to withdraw Child Benefit entitlement altogether for higher-rate Income Tax payers.

Now more than 10 years old, the High Income Child Benefit Charge (HICBC) still affects people in the same income bracket. That will include you if:

  • you or your partner has an individual income of more than £50,000 a year and you or they get Child Benefit or
  • someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s living costs.

Need to know! Even if the child is not biologically yours, if someone in your household (ie your spouse or partner) claims Child Benefit and your individual income is more than £50,000, HICBC rules can affect you, which can mean you MUST declare the Child Benefit received via a Self Assessment tax return.

Here are 15 other key facts you should know about the High Income Child Benefit Charge (HICBC).

Is your income over the HICBC threshold?

1. To work out if your income is above the £50,000 High Income Child Benefit Charge (HICBC) threshold, you must work out your “adjusted net income”. This is your total income before any tax allowances.

2. Your adjusted net income isn’t just restricted to money you earn from employment or self-employment. It can include employment perks such as a company car or medical insurance, as well as interest you get from savings/dividends and property rental income.

Which partner pays the High Income Child Benefit Charge?

3. If you and your partner each have an adjusted net income of more than £50,000, the person with the higher income is liable for the High Income Child Benefit Charge (HICBC).

4. Partner means spouse, civil partner or someone else you live with  – not someone from whom you’re separated or divorced.

Do you have to pay the High Income Child Benefit Charge?

5. You can choose to opt out of getting Child Benefit payments, which means you won’t have to pay the High Income Child Benefit Charge (HICBC).

6. To opt out of Child Benefit payments, you can either fill in an online form or contact the Child Benefit Office by phone or post.

Top tip! You’ll need a Government Gateway user ID and password to fill in the online form. If you don’t have a user ID, you can create one when you fill in the form.

7. If you do opt out, you should still fill in the Child Benefit claim form, stating that you do not want to receive Child Benefit payments.

8. Filling in the Child Benefit claim form means you’ll get National Insurance credits, which count towards your State Pension, while the child should get a National Insurance number before they’re 16 without having to apply for one.

Need to know! After you opt out, you must report any changes in your circumstances that affect your entitlement to Child Benefit.

What if you’re affected by HICBC and still want to claim Child Benefit?

9. If your adjusted net income is above the HICBC threshold and you want to claim Child Benefit payments, you’ll need to report the Child Benefit you receive by completing a Self Assessment tax return (SA100) each year and filing it with HMRC (the online-filing deadline is midnight on 31 January each year).

10. To file a tax return, if you’re not already, you’ll first need to register for Self Assessment, which is the system HMRC uses to collect Income Tax.

11. There are penalties to pay if you do not register for Self Assessment and pay the High Income Child Benefit Charge (HICBC) after filing a tax return. 

12. When filling out your Self Assessment tax return, you’ll need to provide details of your total taxable income for the tax year. HMRC will then tell you how much HIBC is payable.

How is the High Income Child Benefit Charge determined?

13. The High Income Child Benefit Charge (HICBC) you pay is determined by two things: your Child Benefit entitlement and your adjusted net income.

14. The High Income Child Benefit Charge (HICBC) is equal to 1% of a family’s Child Benefit for every £100 of adjusted net income that’s over £50,000 each year up to £60,000.

15. If your net income is more than £60,000, the High Income Child Benefit Charge (HICBC) will be 100% of the Child Benefit, so claiming Child Benefit is pointless, it’s better to opt out.

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Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.

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