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High Income Child Benefit Charge explained

High Income Child Benefit Tax Charge explained

What is the High Income Child Benefit Tax Charge?

The High Income Child Benefit Tax Charge can claw back up to 100% of any child benefit for individuals earning above £50,000.

Who pays the High Income Child Benefit Tax Charge?

You will have to pay High Income Child Benefit Tax Charge if you earn over £50,000 and any of these 3 conditions apply to you:

  • You receive Child Benefit
  • Your partner receives Child Benefit
  • Someone else receives Child Benefit, for a child living with you and they contribute at least an equal amount towards the child’s upkeep.

Note: It does not matter if the child living with you is not your own child.

How much is the High Income Child Benefit Tax Charge?

If your income is less than £50,000 you have no High Income Child Benefit Tax Charge to pay

If your income is £60,000 or more and you meet the conditions above, the High Income Child Benefit Tax Charge is 100% of the Child Benefit received.

If your income is between £50,000 and £60,000 the High Income Child Benefit Tax Charge is tapered.

How to calculate High Income Child Benefit Tax Charge if your income is between £50,000 and £60,000?

For every £100 of income above £50,000 the High Income Child Benefit Tax Charge is 1% of the Child Benefit received in the tax year.

The High Income Child Benefit Tax Charge will never exceed the total Child Benefit received.

Calculation for High Income Child Benefit Tax Charge = (Income – £50,000)/£10,000 X Child Benefit

Always round down to the nearest whole number.

How to pay High Income Child Benefit Tax Charge?

The High Income Child Benefit Tax Charge is paid through Self-Assessment. The deadline is the 31st January following the end of the tax year.

However, if you submit your tax return by the 31st December following the end of the tax year the amount can be collected through the Pay As You Earn system by adjusting your tax code.

This is the link to register for self-assessment: https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-not-self-employed

Bonus question: I am on a career break without any income, should I claim child benefit only for my high earning partner to incur the High Income Child Benefit Tax Charge?

If you are not earning (or are a low earner) making the Child Benefit claim will give you Class 3 NIC credits which contributes towards your state pension eligibility.

It is possible to claim the benefit but ask not to receive the payments, thus avoiding the requirement to repay through the Self-Assessment system.

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