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The High-Income Child Benefit Charge (HICBC)

You may have to pay a tax charge, known as the ‘High Income Child Benefit Charge’, if you have an individual income over £50,000 and either:

  • you or your partner get Child Benefit
  • someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep

It does not matter if the child living with you is not your own child.

What counts as income?

To work out if your income is over the threshold, you’ll need to work out your ‘adjusted net income’. Adjusted net income is total taxable income minus certain tax reliefs, for example trading losses (for the self-employed), Gift Aid charity donations, and pension contributions.

How much is the charge?

The charge is equal to one per cent of a family’s Child Benefit for every £100 of income that is over £50,000 each year. If an individual’s income is over £60,000, the charge will equal the total amount of the Child Benefit.

Who pays the tax charge?

If your individual income is over £50,000 and so is your partner’s, then whoever has the higher income is responsible for paying the tax charge.

‘Partner’ means someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.

How do I pay the charge?

Individuals who need to pay the charge must submit a Self-Assessment tax return each tax year, even if they are employed, and normally pay their tax through Pay As You Earn (PAYE).

If your income is over the threshold

You can choose too either:

  • get Child Benefit payments, and pay any tax charge at the end of each tax year
  • not get Child Benefit payments, and not pay the tax charge

If you choose to not get Child Benefit

You can still fill in the Child Benefit claim form. You need to state on the form that you do not want to get payments.

You need to fill in the claim form if you want to:

  • get National Insurance credits, which count towards your State Pension
  • ensure your child gets their National Insurance number automatically before they’re 16 – otherwise they need to apply for one themselves

Already getting Child Benefit

You can choose too either:

  • stop getting Child Benefit – sometimes known as ‘opting out’
  • carry on getting Child Benefit and pay any tax charge at the end of each tax year