High-Income Child Benefit Charge

Approximately 180,000 families are encouraged to reconsider claiming child benefit following changes to the high-income child benefit charge (HICBC), which apply from 6 April 2024, when the thresholds will be increased. You may have to pay the HICBC if you are considered to have ‘high income’ and child benefit is being paid in relation to a child that lives with you, regardless of whether you are a parent of that child.  If you are living with another person in a marriage, civil-partnership or long-term relationship, you will only be liable to HICBC if you are the higher earner of the two. The limits are as follows: –
  2024/25 2023/24
Child benefit ‘high-income’ threshold £60,000 £50,000
Income level at which child benefit is fully clawed back £80,000 £60,000
From 2024/25, the HICBC will be calculated at 1% of the child benefit received for every £200 of income above the threshold. In previous years, this was clawed back at the rate of 1% for every £100 of income over the threshold. Child benefit is only clawed back in full where income exceeds £80,000, rather than £60,000 previously. The HICBC does not apply if the child benefit claimant opts out from claiming. Many will have opted out as income reaches £60,000 to avoid the hassle of receiving money and then having to pay it all back again. People in those situations should now look to opt back in again. After all, for a family with 2 children, the child benefit in 2024/25 is worth £2212.60 p.a. tax free if earning £60,000. If you know anyone in that position where they have opted out, suggest to them that they may like to reconsider opting back in. Please feel free to contact us for an in-depth review.