The High Income Child Benefit Charge (HICBC) is a tax charge that claws back Child Benefit from high-earning households. The thresholds changed materially in April 2024, and a hidden 60% effective tax rate still catches many families out. If either parent earns over £60,000, this is the rule that governs how much Child Benefit you actually keep.
Child Benefit — the amounts
Child Benefit is paid to the main carer, free of income tax at the point of receipt. For 2025/26:
How HICBC works
If you or your partner has "adjusted net income" above £60,000, you pay back Child Benefit through the tax system. It's 1% of the benefit for every £200 of income over £60,000. At £80,000+ you lose 100% of it.
| Higher earner income | HICBC claw-back |
|---|---|
| £60,000 or less | 0% — full benefit kept |
| £60,001 – £79,999 | Taper: 1% per £200 over £60k |
| £65,000 | 25% clawed back |
| £70,000 | 50% clawed back |
| £75,000 | 75% clawed back |
| £80,000 or more | 100% — full benefit clawed back |
Only the higher earner in the couple is tested — if you earn £120k and your partner earns £20k, you're at full claw-back. If you each earn £59k (total £118k household), no HICBC applies.
What counts as adjusted net income
The test isn't your gross salary — it's adjusted net income:
- Start with taxable income (employment, self-employment, rental, dividend, interest).
- Deduct: grossed-up pension contributions (non-relief-at-source), Gift Aid donations grossed up.
- Do NOT deduct: personal pension contributions that already got higher-rate relief via PAYE.
- Salary sacrifice for pension reduces gross income before this test — one of the most effective HICBC mitigations.
Should you still claim Child Benefit if you'll pay it back?
Yes — even if you'll pay it all back via HICBC. Two reasons:
- State pension credits — claiming Child Benefit grants National Insurance credits for the non-working parent. Missing these can cost £250+/year of state pension for life.
- Automatic NI number for the child — claim triggers the child's NI number being issued at age 16 automatically.
You can tick "do not pay the benefit" while still submitting the claim. That avoids paying and clawing back while preserving the NI credit.
Reporting HICBC — Self Assessment
The higher-earning partner must report HICBC via Self Assessment. Until April 2026 that meant registering for SA even if PAYE-only. From April 2026, HMRC is moving HICBC collection into PAYE for most employees — similar to Marriage Allowance, handled via the tax code.
Planning around HICBC
- Pension salary sacrifice — most effective. Reduces gross income, saves on tax+NI+HICBC simultaneously (see pension allowances).
- Gift Aid — charity donations get grossed up and reduce ANI.
- EV salary sacrifice — lowers gross salary, also dodges HICBC proportionally.
- Income splitting between spouses — if one earns £150k and the other £10k, restructuring income towards the lower earner (dividends, rental ownership) reduces HICBC.
- Top-slicing with bonus timing — agreeing with employer to defer bonus into a future tax year helps only if that year will be lower.