Even if you earn over £60,000, don’t ignore Child Benefit. Here’s why you should still claim and how the tax charge works.
For the broader PocketWise overview of rates, NI credits, older children and special cases, use the main Child Benefit hub.
How the High Income Child Benefit Charge Works
The Basics
| Income of Higher Earner | HICBC Effect |
|---|---|
| Under £50,000 | Full Child Benefit, no charge |
| £50,000–£60,000 | Partial charge — lose 1% for every £200 above £50,000 |
| Over £60,000 | Full charge — pay back 100% of Child Benefit |
Key Points
- It’s based on the higher earner’s individual income, not household income
- Two parents earning £49,000 each (£98,000 total) pay no HICBC
- One parent earning £60,000 and one earning £0 pay full HICBC
- It applies to your adjusted net income (not gross salary)
Child Benefit Rates (2024/25)
| Children | Weekly Amount | Annual Amount |
|---|---|---|
| 1 child | £26.05 | £1,354.60 |
| 2 children | £43.30 | £2,252.60 |
| 3 children | £60.55 | £3,150.60 |
| 4 children | £77.80 | £4,048.60 |
Calculating the Charge
Between £50,000 and £60,000
The charge is 1% of Child Benefit for every £200 of income above £50,000.
Example — One child, income £55,000:
- Income above £50,000: £5,000
- Number of £200 bands: 25
- Charge: 25% of £1,354.60 = £338.65/year
- Net benefit received: £1,354.60 — £338.65 = £1,015.95/year
At £60,000+
You repay 100% of the Child Benefit:
| Children | Annual Benefit | HICBC (100%) | Net Benefit |
|---|---|---|---|
| 1 | £1,354.60 | £1,354.60 | £0 |
| 2 | £2,252.60 | £2,252.60 | £0 |
| 3 | £3,150.60 | £3,150.60 | £0 |
At this point, receiving payments seems pointless — but there are still strong reasons to register your claim.
Why You Should Always Claim (Even Over £60k)
1. National Insurance Credits for the Non-Working Parent
If one parent earns over £60k and the other is not working (or earning under the NI threshold):
- The non-working parent receives Class 3 NI credits through the Child Benefit claim
- These count towards their State Pension (you need 35 qualifying years for the full amount)
- Each missing year could cost £300+/year in State Pension for the rest of their life
- Over a 20-year retirement, one missing NI year = £6,000+ in lost pension
This alone makes it worth claiming even if you pay back 100% of the benefit.
2. Child’s National Insurance Number
When your child turns 16, they’re automatically issued a National Insurance number if you’ve claimed Child Benefit. Without a claim, they need to apply separately.
3. You Can Opt Out of Payments
You can register a Child Benefit claim but opt out of receiving payments. This means:
- No money comes in, so no HICBC to pay
- You don’t need to file a Self Assessment return just for HICBC
- The NI credits and NI number benefits still apply
This is the simplest option if you earn well over £60,000.
How to Reduce Your Adjusted Net Income
The HICBC uses adjusted net income, not gross salary. You can reduce this through:
Pension Contributions
| Strategy | Effect |
|---|---|
| Salary sacrifice | Reduces gross pay directly — most effective |
| Personal pension | Gross contribution deducted from adjusted net income |
| Employer contributions | Not counted as your income |
Example: Salary £62,000. You contribute £3,000 via salary sacrifice. Adjusted net income = £59,000. HICBC drops from 100% to 45%.
Gift Aid Donations
Charity donations through Gift Aid are grossed up and deducted from adjusted net income.
Example: £1,000 Gift Aid donation = £1,250 gross, deducted from your income.
Trading Losses
If you have self-employment losses, these reduce your adjusted net income.
Practical Strategy
If your income is close to £50,000 or £60,000, pension contributions are the most effective tool. Putting extra into your pension:
- Reduces your HICBC charge
- Gets you tax relief on the contribution
- Builds your retirement fund
| Income | Pension Increase Needed | HICBC Saving (2 children) | Tax Relief on Contribution |
|---|---|---|---|
| £55,000 | £5,000 to reach £50k | £562.65 | £2,000 (40%) |
| £62,000 | £2,000 to reach £60k | £225.26 per £2k band | £800 (40%) |
Self Assessment Requirements
If you or your partner receives Child Benefit payments and either of you earns over £50,000:
- The higher earner must register for Self Assessment
- File a tax return by 31 January following the end of the tax year
- Pay the HICBC through your tax return
If you opt out of receiving payments, you don’t need to file a return just for this reason.
Common Mistakes
Not Claiming at All
The biggest mistake. Even at very high incomes, the NI credits for the non-working parent are extremely valuable. Always register the claim.
Not Knowing Your Partner Earns Over £50k
The charge applies to the highest earner in the household. If your new partner moves in and earns over £50k, the HICBC may now apply.
Forgetting to File Self Assessment
HMRC can charge penalties for late Self Assessment returns:
- 1 day late: £100 penalty
- 3 months late: £10/day (up to £900)
- 6 months late: 5% of tax owed or £300 (whichever is greater)
- 12 months late: Further 5% or £300
Not Considering Salary Sacrifice
Many people pay the full HICBC when a small pension contribution increase would eliminate or reduce it — saving money twice over.