1% of Child Benefit payments must be paid back to HMRC for every £200 earned above £60,000 (Image: Getty)
HM Revenue and Customs (HMRC) has confirmed a £200 tax charge rule for UK households claiming Child Benefit.
The rule applies to high income households where one partner earns more than £60,000 per year, making them subject to pay the High Income Child Benefit Charge (HICBC). Under the current rules, which apply to claimants in the 2026/27 tax year, 1% of Child Benefit payments must be paid back to HMRC for every £200 earned above £60,000. The tax charge was previously set at 1% of your Child Benefit for every £100 of earnings over a £50,000 threshold, but from the tax years 2024 to 2025 onwards, repayments kick in once annual earnings reach £60,000 at a rate of 1% of every £200 above the limit.
For households with even higher earnings of £80,000 or more, all of the Child Benefit must be paid back to HMRC.
Confirming the charge for the 2026/27 tax year, HMRC said: “From tax year 2024 to 2025 onwards, if you or your partner earn more than £60,000 a year, you’ll have to pay some of your Child Benefit back. If you or your partner earn £80,000 or more, you’ll have to pay all of it back.
“You’ll pay back 1% of your Child Benefit for every £200 you earn over the threshold. Example: Your adjusted net income is £67,600 in tax year 2024 to 2025. This is £7,600 over the £60,000 threshold. As 7,600 divided by 200 is 38, you’ll pay back 38% of your Child Benefit.”
If your adjusted net income is over the threshold and so is your partner’s, then whoever has the higher income is responsible for paying the tax charge.
‘Partner’ refers to someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.
As the HICBC charge is based on individual income, rather than household income, some Child Benefit claimants can be caught out by the rules and not realise they face a tax charge.
The charge can also apply if someone else receives Child Benefit for a child living with you, provided they contribute at least an equal amount towards the child’s upkeep.
If your income exceeds the threshold, you can choose to either get Child Benefit payments and pay the tax charge, or opt out of getting payments and not pay the tax charge. If you do opt to pay the tax charge, this can be done through your PAYE tax code or through Self Assessment.
In a warning to claimants, Andy Wood, tax expert at Tax Barrister UK, said: “The key figure parents need to understand is adjusted net income. This is not always the same as salary, as it can include things like savings interest, dividends and other taxable income.
“Pension contributions and Gift Aid donations can reduce adjusted net income, so families should check the full calculation before assuming they are over the limit.
“A lot of people assume Child Benefit should simply be cancelled once they cross the threshold, but that is not always the best option.
“In some cases, continuing to claim Child Benefit while repaying the charge can still protect National Insurance credits and entitlement to the State Pension.”