Quick Summary
- • If you or your partner earns over £60,000, you pay back 1% of Child Benefit for every £200 earned
- • At £80,000+, you repay 100% (the full benefit is clawed back)
- • The charge is based on "Adjusted Net Income"—so pension contributions can reduce it
- • Even if you pay the full charge, you should still claim Child Benefit to protect your State Pension credits
What is the High Income Child Benefit Charge?
Child Benefit is a universal payment designed to help families with the cost of raising children. As of 2024/25, it's £25.60/week for the first child and £16.95/week for each additional child. Rates are published by HMRC on their Child Benefit tax charge page .
However, if you or your partner's Adjusted Net Income exceeds £60,000, the government starts clawing back the benefit via the High Income Child Benefit Charge (HICBC).
How the Charge Works:
- 1For every £200 you earn above £60,000, you pay back 1% of the total Child Benefit received
- 2The charge reaches 100% at £80,000+ (you repay the entire benefit)
- 3The charge is based on the higher earner's income if you're a couple
- 4You pay the charge via self-assessment after the end of the tax year
Calculation Examples
Example 1: £70,000 Income, 2 Children
Child Benefit received per year:
- • First child: £25.60 × 52 = £1,331
- • Second child: £16.95 × 52 = £881
- Total: £2,212/year
HICBC Calculation:
- • Income above £60k: £70,000 - £60,000 = £10,000
- • Number of £200 increments: £10,000 ÷ £200 = 50
- • Charge percentage: 50 × 1% = 50%
- Charge to pay: £2,212 × 50% = £1,106
Net Child Benefit: £2,212 - £1,106 = £1,106/year
Example 2: £85,000 Income, 1 Child
Child Benefit received: £1,331/year
Income above £60k: £85,000 - £60,000 = £25,000
Charge percentage: 125% (capped at 100%)
Charge to pay: £1,331 (the entire benefit)
At £80,000+, you repay 100% of the benefit, so you effectively receive nothing.
How to Reduce or Avoid the Charge
1. Pension Contributions (Most Effective)
Because HICBC is based on Adjusted Net Income, pension contributions reduce the charge.
Real Example:
- Salary:£70,000
- Child Benefit received (2 children):£2,212/year
- HICBC at £70k:-£1,106/year
- Pension contribution to get below £60k:£10,000/year
- New Adjusted Net Income:£60,000
- HICBC:£0
Bonus: The £10k pension contribution also saves you £4,000 in income tax (40%) + £200 NI (2%). Total annual benefit: £4,200 tax + £1,106 HICBC saved = £5,306!
2. Gift Aid Donations
Charitable donations via Gift Aid also reduce Adjusted Net Income. If you donate £10,000 to charity, your ANI drops by £10,000—same effect as a pension contribution for HICBC purposes.
3. Income Splitting (Business Owners)
If you run a business with your spouse/partner, you can allocate income to the lower earner to keep both below the £60k threshold.
Warning: This must be done legitimately through shareholding or partnership agreements. HMRC has rules to prevent artificial income splitting ("settlements legislation").
4. Strategic Bonus Timing
If you have some control over when bonuses are paid, splitting a large bonus across two tax years can keep you below thresholds each year.
Should You Opt Out of Child Benefit?
Many high earners choose not to claim Child Benefit to avoid the admin of self-assessment. However, this is often a mistake.
Why You Should Still Claim (Even at £80k+):
- 1.
State Pension Protection
The parent claiming Child Benefit (usually the lower/non-earner) gets National Insurance credits, protecting their State Pension entitlement even if not working.
- 2.
Future Income Changes
If the higher earner's income drops below £60k in future years (redundancy, career break, etc.), you'll automatically receive the benefit again without re-applying.
- 3.
Child Benefit Number
Your child gets a Child Benefit number, which is sometimes required for things like passport applications and certain financial products.
Our Recommendation:
Always claim Child Benefit, but tick the box to "opt out of receiving payments" if you earn £80k+. This protects NI credits while avoiding the admin burden of repaying the charge. If your income drops in future, you can start receiving payments again.
Common Questions
What if both parents earn £50k each?
You won't face the HICBC because neither partner exceeds £60k individually. The charge is based on the higher earner's income, not household income. This creates a "marriage penalty" where a household earning £120k (£60k each) keeps the full benefit, but a household earning £80k (one earner) pays it all back.
Do I need to file a tax return just for HICBC?
Yes. If you or your partner earns over £50k and you receive Child Benefit, HMRC requires the higher earner to file a self-assessment tax return to declare and pay the charge—even if you're a PAYE employee with no other reason to file.
Can I backdate a Child Benefit claim?
Yes, but only for up to 3 months from the date of your claim. If you're close to the income threshold and considering a pension top-up, claim Child Benefit first, then adjust your pension to avoid the charge.
Calculate Your HICBC Liability
Use our calculator to model exactly how pension contributions can reduce or eliminate your Child Benefit charge.
About This Guide
Written by the Tax Trap Calculator editorial team · Last reviewed February 2026 for the 2025/26 tax year. Child Benefit rates and HICBC thresholds sourced from HMRC's official Child Benefit guidance. This guide is for informational purposes only. Consult a qualified tax advisor for personalised advice.
© 2026 Tax Trap Calculator. Not financial advice.
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