The changes to the High Income Child Benefit Charge (HICBC), introduced in the Spring Budget, came into effect on 6 April 2024. The income threshold for the HICBC has been raised from £50,000 to £60,000.
Now, the HICBC is charged at 1% of the total Child Benefit award for every £200 (previously £100 in 2023-24) of income for the highest earner in a household earning between £60,000 and £80,000 (previously £50,000 to £60,000 in 2023-24). For those with incomes over £80,000 (previously £60,000 in 2023-24), the charge will equal the total Child Benefit received, effectively nullifying the financial benefit of receiving Child Benefit.
This increase in the HICBC threshold is anticipated to positively impact around 485,000 families. Moving forward, the government plans to administer the HICBC on a household basis rather than an individual basis, but this change is expected to take until at least April 2026 to implement. This timeline may be affected by the upcoming general election.
For new Child Benefit claims made after 6 April 2024, any backdated payments will be treated as though the entitlement occurred in the 2024-25 tax year, provided that backdating would otherwise result in a HICBC liability in the 2023-24 tax year.
If the HICBC applies to you or your partner, it is usually beneficial to continue claiming Child Benefit. This can help protect certain benefits and ensure your child receives a National Insurance number. However, you have the option to either continue receiving Child Benefit and pay the tax charge, or stop receiving Child Benefit to avoid the charge.
