High Income Child Benefit Charge

Long awaited changes to the High Income Child Benefit Charge (HICBC) were announced in the March 2024 Budget.  The HICBC has attracted criticism since its introduction in 2013 as by many it is seen as unfair and with the threshold for payment of the charge having not increased in over ten years, more and more families have been dragged into the charge and the self-assessment regime, with increasing pay over the years.

From 6 April 2024, individuals will become liable for the HICBC if they have adjusted net income in excess of £60,000 (an increase from £50,000).  If adjusted income levels are between £60,000 and £80,000 then there will be a partial clawback of Child Benefit.  Those individuals with adjusted net income in excess of £80,000 will be required to repay 100% of any Child Benefit claimed.

Furthermore, it was announced that consultations would take place with the aim to change the eligibility of Child Benefit to household income as opposed to individual incomes. 

Adjusted net income includes employment income and/or self-employment profits, including the value of any taxable benefits from employment, but after any personal pension contributions and / or charitable donations under Gift Aid.  Personal pension contributions can therefore be made to reduce adjusted net income to below the Child Benefit threshold.

If you have never claimed Child Benefit or have previously cancelled Child Benefit due to income levels, due to the changes in thresholds, you may now wish to begin claiming Child Benefit or revoke any election previously made to stop claiming the benefit.

Further information can be found here, including details of how to claim - Child Benefit: How it works - GOV.UK (www.gov.uk)