Parents may have to pay back some money, officials said today
HM Revenue and Customs has issued a warning to anyone earning more than £60,000. In a new post on X the tax collector issued an alert and said some people would have to pay money back.
HMRC said: “Do you earn over £60,000? You may need to pay the High Income Child Benefit Charge.” Officials added: “You or your partner may have to pay the High Income Child Benefit Charge if either of you receives Child Benefit and at least one of you earns more than the threshold. This means you will have to pay some or all of your Child Benefit back.
“The charge may also apply if someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep.”
Approximately 440,000 individuals paid back a total of £525 million in High Income Child Benefit Charge (HICBC) during the 2022/23 tax year. These individuals, where one partner in a household earned over £50,000, had to repay some or all of their child benefit, according to official figures.
The threshold
An individual income is over the threshold if it’s:
- over £60,000 for tax years starting from 2024 to 2025
- over £50,000 for tax years up to and including the tax year 2023 to 2024
What counts as income
HMRC says to work out if your income is over the threshold, people will need to work out your ‘adjusted net income’. Adjusted net income is the total taxable income, which includes savings interest and dividends. It’s calculated before any Personal Allowances and less certain tax reliefs, such as pension contributions and Gift Aid.
Working out the tax charge
Parents can use the Child Benefit tax calculator to get an estimate of how much of the Child Benefit they will have to pay back.
From tax year 2024 to 2025 onwards
If either person earns more than £60,000 a year, they’ll have to pay some of their Child Benefit back. If either earns £80,000 or more, they’ll have to pay all of it back.
People will pay back 1% of the Child Benefit for every £200 you earn over the threshold. Example: Adjusted net income is £67,600 in tax year 2024 to 2025. This is £7,600 over the £60,000 threshold. As 7,600 divided by 200 is 38, you’ll pay back 38% of your Child Benefit.
For more information from HMRC click here.
