Child Benefit pays £26.05 per week for your eldest child and £17.25 for each additional child. That's £1,354 a year for one child, or £2,251 for two. Decent money — until the High Income Child Benefit Charge (HICBC) starts eating into it.
How the charge works
If either parent in a household has an individual income above £60,000, a tax charge kicks in that claws back some of the child benefit. The charge equals 1% of the child benefit received for every £200 of income above £60,000. Once income hits £80,000, the charge equals 100% of the benefit — effectively wiping it out entirely.
The threshold was raised from £50,000 to £60,000 in April 2024, which took about 170,000 families out of the charge. But it's still based on individual income, not household income, which creates some odd situations. A household where both parents earn £59,000 each (£118,000 combined) keeps all their child benefit, while a single-earner household on £70,000 loses a chunk of it.
Calculating what you owe
The maths is proportional. If you earn £65,000 and receive £1,354 in child benefit for one child:
- Income above threshold: £65,000 - £60,000 = £5,000
- Number of £200 chunks: £5,000 / £200 = 25
- Charge: 25% of £1,354 = £338.50
You keep £1,015.50 of the benefit. Not amazing, but not nothing either. You report and pay the charge through self assessment, so if you're not already filing a tax return, you'll need to register for one.
Should you still claim?
Even if the charge wipes out 100% of the benefit, there are reasons to keep claiming:
- National Insurance credits — the parent claiming child benefit (usually the one not working or earning less) gets NI credits that count towards their State Pension. Stop claiming and you could lose those credits.
- Automatic NI number — your child automatically gets their National Insurance number at 16 if you've been claiming child benefit
- Income can change — if the higher earner's income drops below £60,000 in a future year (redundancy, career break, bonus fluctuation), you'd start receiving the benefit again without needing to reapply
You can choose to receive the payments and pay the charge through self assessment, or you can opt out of receiving the payments while keeping the underlying claim active. The second option avoids the self assessment requirement while preserving NI credits.
How to opt out of payments
If you decide you don't want to deal with the self assessment process, you can opt to stop receiving child benefit payments through GOV.UK. Your claim stays active for NI credit purposes. You can restart payments at any time if your circumstances change.
Think of it as pressing pause rather than cancelling. It's a practical choice for higher earners who'd rather not file a return just to give back what they received.
The income definition
"Income" for HICBC purposes is your adjusted net income — broadly, your total taxable income minus certain deductions like pension contributions and Gift Aid. This is worth noting because increasing your pension contributions can bring your adjusted net income below £60,000, allowing you to keep more (or all) of your child benefit.
For example, if you earn £65,000 and contribute £5,000 extra to your pension, your adjusted net income drops to £60,000, and the charge disappears. You've effectively redirected money you were going to lose anyway into your retirement savings. Your pension provider and tax adviser can help you work out the exact numbers.