Changes to the High Income Child Benefit Charge (HICBC) came into effect on 6 April 2024. The income threshold at which HICBC starts to be charged increased to £60,000 (from £50,000).
The charge is calculated at 1% of the full Child Benefit award for every £200 (2023-24: £100) of income 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 is the same as the amount of Child Benefit received. The HICBC therefore either reduces or removes the financial benefit of receiving Child Benefit.
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.
Even if HICBC applies to you or your partner, it’s generally still beneficial to claim Child Benefit as doing so can safeguard certain benefits and ensure your child receives a National Insurance number. Claims can be made by using the HMRC app or online resources. New claims are automatically backdated for up to 3 months or to the child’s birth date if later.
Taxpayers can choose to continue receiving Child Benefit – and pay the tax charge – or opt to stop receiving benefits and avoid the charge.