High Income Child Benefit Charge threshold increase

From April 2024, the threshold at which the High Income Child Benefit Charge (HICBC) begins to apply was increased from £50,000 to £60,000. Additionally, the rate at which the charge is applied has been halved.

This means Child Benefit is now only fully withdrawn once one parent's income reaches £80,000. Many families who previously opted out of receiving the benefit may now find it worthwhile to re-register.

How the new rules work

Under the revised rules, if the highest earner in a household has an 'adjusted net income' between £60,000 and £80,000, they will have to pay a tax charge equivalent to 1% of the Child Benefit for every £200 of income above £60,000. This is a much gentler taper than the previous system, which withdrew the benefit entirely over a £10,000 band.

Re-registering for Child Benefit

Many parents earning between £50,000 and £80,000 previously chose to stop receiving Child Benefit payments to avoid the administrative burden of filing a Self Assessment tax return to pay the charge. With the increased thresholds, these families should consider restarting their payments, as they will now be entitled to keep at least a portion of the money.

Future changes

The government has also indicated its intention to move the HICBC to a household-based system by April 2026. This would address the perceived unfairness where a household with two parents earning £59,000 each (total £118,000) keeps all their Child Benefit, while a household with a single earner on £81,000 loses it entirely. However, implementing a household-based test will require significant changes to HMRC's systems.