The changes to the High Income Child Benefit Charge (HICBC) announced as part of the Spring Budget came into effect on 6 April 2024. The income threshold at which HICBC starts to be charged has been increased from £50,000 to £60,000.
The HICBC is charged at the rate of 1% of the full Child Benefit award for each £200 (2023-24: £100) of income of the highest wage earner between £60,000 and £80,000. (2023-24: between £50,000 and £60,000). For taxpayers with income above £80,000 (2023-24: £60,000) the amount of the charge will equal the amount of Child Benefit received. The HICBC therefore either reduces or removes the financial benefit of receiving child benefit.
The increase in the HICBC threshold is expected to have a positive impact for around 485,000 families. Going forward, the government intends to administer the HICBC on a household rather than individual basis, but this move is expected to take until at least April 2026 to implement and may or may not be changed following the announced general election.
For new Child Benefit claims made after 6 April 2024, any backdated payment will be treated for HICBC purposes as if the entitlement fell in the 2024-25 tax year – if backdating would otherwise create a HICBC liability in the 2023-24 tax year.
If the HICBC applies to you or your partner it is usually worthwhile to continue your claim for Child Benefit for your child, as it can help to protect certain benefits and will make sure your child receives a National Insurance number. However, you still have the choice to keep receiving child benefit and pay the tax charge, or you can elect to stop receiving Child Benefit and not pay the charge.