Thousands of households receiving Child Benefit will now have the option to settle the high income tax charge using their tax code for the first time.
Child Benefit amounts to £26.05 weekly for the first child and £17.25 for each subsequent child. If your income is high, you may need to repay a portion of this benefit. Individuals earning over £60,000 must repay 1% of their Child Benefit for every £200 over this threshold, known as the High Income Child Benefit Charge.
Upon surpassing £80,000 in earnings, the entire Child Benefit must be repaid. Typically, the high income charge is settled through self-assessment, but now, it can be managed via the PAYE tax code.
HMRC will adjust your tax code to deduct the charge from your salary. This service is accessible for employed individuals not required to file a self-assessment return for other reasons.
The deadline to opt in for the 2024/25 tax year is January 31, 2026, which concluded on April 5, 2025. If self-assessment is mandatory for you, the PAYE option is not available. High-income households can claim Child Benefit without receiving payments, ensuring National Insurance credits for the state pension without the charge.
Child Benefit is utilized by over seven million families for children under 16 or under 20 in approved education or training. The child must reside with you or have similar financial support for claim eligibility.
Fostering or adopting a child, and caring for a child of a friend or relative may also qualify for Child Benefit. There is no limit on children claimed, but only one caregiver can receive the benefit if multiple individuals care for a child.
Dan Tomlinson, Exchequer Secretary, mentioned the simplification of tax procedures by HMRC. Parents can avoid filing tax returns by utilizing the new straightforward system for paying the High Income Child Benefit Charge.
By signing up, individuals receive a new tax code reflecting the HICBC deduction. Income fluctuations and Child Benefit adjustments are promptly reflected in their tax code throughout the year.