HM Revenue and Customs (HMRC) has issued a warning to households claiming Child Benefit that have recently had a pay rise, as they may face extra tax charges. The tax office has cautioned that claimants with annual earnings exceeding £60,000 may be required to repay some or all of their Child Benefit payments.
Who is affected by the High Income Child Benefit Charge?
The warning applies to households where one partner has an annual income of more than £60,000, making them subject to the High Income Child Benefit Charge (HIBC). For the 2026 to 2027 tax year, HMRC rules state that Child Benefit claimants face a tax repayment charge of 1% of every £200 earned above the £60,000 threshold.
Previously, the tax charge was set at 1% of Child Benefit payments for every £100 of earnings over £50,000. However, from tax years 2024 to 2025 onwards, repayments apply once annual earnings reach £60,000.
Repayment rates and thresholds
These repayments are currently charged at a rate of 1% of every £200 earned above £60,000. For households with even higher earnings of £80,000 per year or more, all of the Child Benefit must be paid back in full to HMRC.
Households that have recently had a pay rise may find that their wage now pushes them above the £60,000 annual income threshold, meaning the HICBC will apply.
HMRC's warning on social media
In a warning to Child Benefit claimants on X this week, HMRC said: “Recently had a pay rise? If you’re now earning over £60k and you get Child Benefit you may need to pay some of it back.”
“You can use the new High Income Child Benefit Charge service if you don’t already complete Self Assessment. It’s quick and easy with the HMRC app or online.”
How the charge is calculated
If your adjusted net income is over the threshold and so is your partner’s, then whoever has the higher income is responsible for paying the tax charge. ‘Partner’ refers to someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.
As the HICBC charge is based on individual income, rather than household income, some Child Benefit claimants can be caught out by the rules and not realise they face a tax charge. The charge can also apply if someone else receives Child Benefit for a child living with you, provided they contribute at least an equal amount towards the child’s upkeep.
Official guidance for the 2026/27 tax year
Confirming the charge for the 2026/27 tax year, HMRC said: “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.”
“You’ll pay back 1% of your Child Benefit for every £200 you earn over the threshold. Example: Your 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.”
If your income exceeds the threshold, you can choose to either get Child Benefit payments and pay the tax charge, or opt out of getting payments and not pay the tax charge. If you do opt to pay the tax charge, this can be done through your PAYE tax code or through Self Assessment.
Expert advice on adjusted net income
Andy Wood, tax expert at Tax Barrister UK, added: “The key figure parents need to understand is adjusted net income. This is not always the same as salary, as it can include things like savings interest, dividends and other taxable income.”
“Pension contributions and Gift Aid donations can reduce adjusted net income, so families should check the full calculation before assuming they are over the limit.”
“A lot of people assume Child Benefit should simply be cancelled once they cross the threshold, but that is not always the best option. In some cases, continuing to claim Child Benefit while repaying the charge can still protect National Insurance credits and entitlement to the State Pension.”
