HMRC has confirmed a key rule regarding Child Benefit repayments for UK households, with parents facing charges if they earn above certain thresholds. Under the High Income Child Benefit Charge (HICBC), individuals or their partners earning £60,000 or more per year must begin repaying the benefit. The repayment amount increases with income, and once earnings reach £80,000, the full Child Benefit must be repaid.
How the Repayment Works
From the 2024 to 2025 tax year onwards, if you or your partner earn more than £60,000 annually, you will need to repay a portion of your Child Benefit. Specifically, for every £200 earned above the £60,000 threshold, you repay 1% of the benefit. For example, if your adjusted net income is £67,600, which is £7,600 over the threshold, you would repay 38% of your Child Benefit (since 7,600 divided by 200 equals 38).
Once earnings hit £80,000 or more, the full amount of Child Benefit must be repaid. HMRC stated: “From tax year 2024 to 2025 onwards, if you or your partner earn more than £60,000 a year, you’ll have to pay some of your Child Benefit back. If you or your partner earn £80,000 or more, you’ll have to pay all of it back.”
New Digital Service for Payments
HMRC has reminded parents of these rules via social media, including a post on X (formerly Twitter). The tax authority said: “Just had a baby? Congratulations! If you or your partner earn between £60,000 and £80,000, you can still claim Child Benefit. Our new digital service lets you pay the High Income Child Benefit Charge through your salary – no tax return needed.”
This new service simplifies the repayment process, allowing parents to adjust their tax code or pay through their salary without filing a self-assessment tax return.
Child Benefit Rates and Claiming
From 6 April, claimants will receive £27.05 per week (or £1,406.60 per year) for the eldest or only child, and £17.90 per week (or £930.80 per year) for each additional child. There is no limit on the number of children parents can claim for. These rates represent an annual increase of £52 and £33.80 respectively.
Despite over 6.9 million families receiving Child Benefit, only 72% of families claimed it in their baby’s first year. A Child Benefit claim can only be backdated for up to three months from the date HMRC receives the claim, meaning thousands of families may be missing out on payments.
