The HICBC quietly takes back Child Benefit through the tax system once one partner earns over £60,000, rising to a full clawback at £80,000.
The High Income Child Benefit Charge (HICBC) is one of the most disliked features of the UK tax system, because it claws back a family benefit through an unrelated income tax charge. If one partner earns over £60,000, HMRC gradually takes Child Benefit back, and the charge falls on the higher earner even if the other partner is the one claiming it.
The charge depends on adjusted net income, which is your total taxable income minus reliefs like gross pension contributions and Gift Aid donations. Between £60,000 and £80,000 the charge tapers: for every £200 of adjusted net income above £60,000, you repay 1% of your Child Benefit. At £80,000 you hit 100% and the benefit is fully recovered.
This taper creates a steep effective tax rate in the £60,000 to £80,000 band, because you lose part of the benefit on top of paying 40% Income Tax on the income itself.
Suppose Sam and Alex have two children. Their Child Benefit for 2025/26 is £26.05 a week for the eldest and £17.25 for the second, totalling about £2,251.60 a year. Sam is the higher earner with adjusted net income of £70,000.
Sam's income is £10,000 over the £60,000 threshold. That is 50 lots of £200, so the charge is 50% of the Child Benefit:
£2,251.60 × 50% = £1,125.80 added to Sam's tax bill through Self Assessment.
If Sam paid £10,000 (gross) into a pension, his adjusted net income would fall to £60,000, removing the HICBC entirely. The family keeps the full Child Benefit and Sam gets pension tax relief on the contribution, a double saving worth modelling carefully. Our Child Benefit calculator shows how the charge changes as income moves.
It is tempting to simply stop claiming Child Benefit to dodge the charge, but that is often a mistake. Claiming Child Benefit (even if you opt out of the payments) gives the claiming parent National Insurance credits that protect their State Pension during years out of paid work, and it secures a National Insurance number for the child automatically at 16. The recommended approach is to claim but tick the box to not receive payments if your income is comfortably above £80,000.
The charge is collected through Self Assessment, so the higher earner must register if they are not already filing. From 2025/26 some employed taxpayers can also pay the charge through their PAYE tax code, so it is worth checking yours; you can check your tax code to see if an adjustment has been applied.
The cruelty of the HICBC is the cliff edge it used to create. The new £60,000 to £80,000 taper softens it, but a well-timed pension contribution can still wipe the charge out entirely.
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