You’re eligible for child benefit if you’re responsible for bringing up a child who is under 16, or under 20 if they stay in approved education or training. There’s no limit to how many children you can claim for.
The High Income Child Benefit charge was introduced by the government in 2013 to reduce the amount of Child Benefit paid to higher earning parents.
Only one parent receives Child Benefit payments and where the parents live apart, the parent the child lives with most will get the money from HMRC.
Due to inflation more parents have surpassed the income threshold where charges are introduced. In the Spring Budget 2024, the Chancellor announced changes to the Child Benefit system to counteract this…
The changes
Currently, parents claiming Child Benefit must repay some of the money received if either earns more than £50,000, and the entire amount if either earns over £60,000.
From 6 April, the income threshold for partial repayment will rise from £50,000 to £60,000, and the threshold for full repayment will rise from £60,000 to £80,000.
Where once the charge was 1% of the Child Benefit payment for every additional £100 earned above the threshold, it’s now 1% for every £200.
Child Benefit is currently worth £24 a week for one child and £15.90 for each additional child. The changes announced will now mean the amounts rise to £25.60 and (additionally) £16.95 a week.
The government have said that this will remove 170,000 families from the tax.
As well as this, from April 2026 (in theory) Child Benefit charge will be determined by household income, rather than by the income of the individual parents.
Finer details
As the change to the thresholds will take place from 6 April 2024, they will only be relevant to the 2024/25 tax year.
Parents affected by the charge (who have not opted out of receiving Child Benefit) should be aware that they will face a tax bill for the benefit they or their partner have received. The changes in April 2024 will alter their liability, so will require attention to budget appropriately.
If you are claiming Child Benefit and think you might need to repay some of it, make sure you are completing a tax return, either through self-assessment, or with the help of a tax expert, such as a member of our team.
In the future, the government has said that parents affected by the charge will no longer have to register to self-assessment to repay what they owe; money will be clawed back via PAYE tax codes. Further information on how this will work will be released in due course.
From April 2026, when Child Benefit charge will be decided by household income, parents may choose to sacrifice more of their salary and retain Child Benefit, where assessing their combined income provides greater certainty than before.
Registering (or re-registering)
You may never have claimed Child Benefit before, or opted out because you were earning over £60,000. In line with the new system, you may be considering registering or re-registering for the payments.
Should you want to do this, either fill in an online form on the government website (where you will need a Government Gateway user ID and password) or contact the Child Benefit Office. It can take up to 21 days before your first payment arrives after the Child Benefit Office receives your request.
Need some assistance?
If you would like some assistance with any of the topics covered in this article, please contact us and member of our team will be happy to help you.
