HMRC has confirmed a tax charge rule that affects UK households receiving Child Benefit, based on every £200 earned above the income threshold. Child Benefit is available to those responsible for a child under 16, or under 20 if they are in approved education or training.
High Income Child Benefit Charge
If you or your partner's adjusted net income exceeds the threshold, you may need to pay the High Income Child Benefit Charge. Adjusted net income is total taxable income before personal allowances, minus certain reliefs like Gift Aid. This includes savings interest and dividends.
If you must pay the charge, you can still receive other Child Benefit advantages, such as National Insurance credits. The charge will not exceed the total Child Benefit payments you receive.
Income Thresholds
For tax years from 2024 to 2025, the threshold is £60,000. For earlier years up to 2023 to 2024, it is £50,000. To determine if your income is over the threshold, calculate your adjusted net income.
You can use the Child Benefit tax calculator to estimate how much you may need to repay. HMRC explains: 'If you or your partner earn more than £60,000 a year, you'll have to pay some of your Child Benefit back. If you or your partner earn £80,000 or more, you'll have to pay all of it back. You'll pay back 1% of your Child Benefit for every £200 you earn over the threshold.'
