Child Benefit is available to families to help cover the cost of raising a child under 16 years of age, or under 20 if they are in full-time education or approved training. This benefit was claimed by over 6 million families according to the latest results published by the Office of National Statistics (August 2023).
In the current 2025/26 Tax Year, Child Benefit is paid in 4-weekly instalments at a rate of £26.05 per week for the eldest child, and £17.25 per week for additional children.
High Income Child Benefit Charge (HICBC)
From 6 April 2024, the Child Benefit is clawed back at a rate of 1% for every £200 earned in excess of the £60,000 threshold, meaning that it is fully repaid once a person’s adjusted net income reaches £80,000. Prior to this, the benefit was reduced at a rate of 1% for every £100 earned between £50,000 and £60,000.
The charge is levied on the highest-earning partner in the household, irrespective of whether they were the one who claimed and received the benefit in the first place.
Currently, taxpayers who are liable for the charge must file Self Assessment Tax Returns to report their income and the amount of Child Benefit they or their partner received in the year.
This rule brings many taxpayers into the scope of Self-Assessment; taxpayers who would otherwise have no reason to file a Tax Return, such as those in employment with their salary taxed under PAYE. For those not normally required to file returns, the whole process adds an unexpected administrative burden on their affairs, which they may not have the knowledge or experience to manage.
This often leads to the unfortunate situation where the unwitting and otherwise honest taxpayer is hit with substantial late filing and payment penalties by HMRC.
What’s changing this summer?
This summer, HMRC are introducing a new digital service where taxpayers can report their Child Benefit payments online and the HICBC is automatically deducted from their salary.
Taxpayers who register for the service or do not meet the Self-Assessment criteria will no longer be required to complete a tax return. This will be welcome news for those who have been hit with the charge in recent years, as well as those who are struggling with the additional admin of preparing and filing a tax return.
For more information, and to discuss your specific circumstances, please get in touch.
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