The High Income Child Benefit Charge (HICBC) reduces or eliminated Child Benefit payments for individuals whose income exceeds a certain threshold. It applies when either parent earns over £60,000 (from April 2024) until it is fully withdrawn at £80,000. It is based on the individual income of the higher earner of the household (and not on the combined household income). This means that HICBC does not apply when each parent earns £59,000, even though their combined income is £118,000.
The HICBC is calculated at 1% of the Child Benefit received for every £200 of income above the £60,000 threshold. This slower rate of clawback — compared to pre-April 2024 change — means Child Benefit is now only fully withdrawn when income exceeds £80,000, rather than £60,000 previously. As a result, many more families are able to retain some or all of their Child Benefit.
The plans to base the HICBC on total household income (rather than the income of the higher earning individual) have been scrapped by the UK government as of October 2024 due to the high administrative and fiscal cost.
Please get in touch if you need help with your self assessment or deciding how to allocate your child benefit.
