After much debate, and consideration of the barriers preventing families from claiming Child Benefit, in the Spring Statement 2025 HM Revenue & Customs (HMRC) announced changes to the collection of the High Income Child Benefit Charge (HICBC).
These changes will give many families more flexibility to choose how they make repayments to HMRC, enabling them to pay the charge directly via their PAYE tax code instead of filing a Self-Assessment tax return.
How will it work?
For eligible employed parents, the option to pay directly through PAYE will be simpler, when compared with needing to register for Self-Assessment, and to prepare and file an annual tax return.
However, those who wish to continue paying the HICBC through Self-Assessment may do so.
Taxpayers who are required to file Self-Assessment tax returns for other reasons, such as self-employment, will still need to report the HICBC on these returns.
Who is Child Benefit for, and what is the HICBC?
You normally qualify for Child Benefit if you’re responsible for a child under 16 and you live in the UK. More details about who is eligible to claim can be found here.
The HICBC is a charge on families where one person earns £60,000 or more. For every £200 over this amount, their Child Benefit is paid back at one per cent.
This means that families must pay back all their Child Benefit where either parent has income in excess of £80,000.
Worth noting is that the HICBC still applies if the child living with you is not your own child but your partner’s.
Families who effectively receive no Child Benefit because of the HICBC still receive the other perks of Child Benefit, such as National Insurance credits and a National Insurance number for each child when they turn 16.
This is why many parents continue to register for Child Benefit, despite not receiving a payment each month.
What should I do now?
At the moment, if you are liable for the HICBC (High-Income Child Benefit Charge) you must pay this via a Self-Assessment tax return.
It is expected that the facility to pay via PAYE will be launched shortly as the Spring Statement made reference to ‘Summer 2025’.
Once live, you will be able to report your family’s child benefit payment through a new HMRC online service, and the charge will be deducted by your employer through your wages each pay period.
If you have previously opted out of Child Benefit payments and would like to opt back in, you will also be able to restart your payments online or via the HMRC app.
To talk to us about the HICBC, Self-Assessment or other personal tax matters, contact our team of experts today.
