The short version: The High Income Child Benefit Charge (HICBC) claws back some or all of your Child Benefit if you or your partner earn above a certain threshold. The more you earn above it, the more you have to pay back.
Who has to pay it?
If either you or your partner earns above the threshold (check gov.uk for the current figure) and you’re claiming Child Benefit, the higher earner has to pay the charge. It doesn’t matter whose name the Child Benefit is in.
How much is the charge?
It’s based on your “adjusted net income” which is basically your total taxable income. The charge increases gradually, and once you hit a higher threshold, you effectively pay back all the Child Benefit you received.
How do you pay it?
Through Self Assessment. If you’re liable for HICBC, you need to register for Self Assessment and declare it on your tax return, even if you don’t normally file one.
Is it worth claiming Child Benefit at all?
Sometimes yes. The National Insurance credits that come with Child Benefit can be valuable for your State Pension, especially if one parent isn’t working. You can claim Child Benefit but opt out of receiving the payments to get the NI credits without the tax charge.
Not sure whether to claim or how the charge affects you? Ask us and we’ll help you work out the best approach.
