Changes to High Income Child Benefit Charge (HICBC) for 2024-25
The changes to high income child benefit charge mean that where a child benefit claimant or their higher earning partner has adjusted net income of between £60,000 and £80,000 (previously £50,000 to £60,000) they will now be able to keep some or all of their child benefit for 2024/25.
Importantly, if they have previously opted not to receive child benefit in order to avoid the HICBC payment, they will need to restart their Child Benefit claim if still eligible to do so.
The HICBC for 2023-24
Up to April 2024, parents earning in excess of £50,000 would have suffered a partial or complete claw-back of their Child Benefit receipts. Rather than pay this charge, parents may have elected to stop receiving benefits.
The HICBC from April 2024
The income limits changed for 2024-25. Now, you may have to pay the High Income Child Benefit Charge if you or your partner have an individual income that is over £60,000 and either you or your partner get Child Benefit or someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep.
It does not matter if the child living with you is not your own child.
What counts as income for HICBC purposes?
Your adjusted net income is your total taxable income before any allowances and not including things like Gift Aid. Your total taxable income includes interest from savings and dividends.
Restarting previously cancelled Child Benefit payments
To avoid the HICBC during 2023-24 or earlier years you may have opted out of receiving Child Benefit payments. Now that the income limits have increased it may be beneficial to re-apply. To do this, use the online forms at https://account.hmrc.gov.uk/child-benefit/make_a_claim/hicbc/opt-in, or call the Child Benefits claims office on 0300 200 3100 (+44 161 210 3086 from outside the UK).
Tax Planning note
If at any time you choose to opt out of getting Child Benefit payments you should still fill in the Child Benefit claim form. You need to state on the form that you do not want to receive payments.
You need to fill in the claim form if you want to get National Insurance credits, which count towards your State Pension and get your child a National Insurance number without them having to apply for one – they will usually get the number before they turn 16 years old.
If you would like to speak to a member of our tax team regarding any area of tax planning, please contact us or call us on 020 7870 9050.
