High income child benefit charge threshold increased

The threshold for earnings above which you have to pay back some or all of your child benefit will be increased from 6 April 2024 with a full overhaul of the regime promised in April 2026.

If you or your partner receive child benefit and your adjusted net income is above £50,000 you are liable to pay some or all of the child benefit back via the high income child benefit charge (HICBC). The HICBC kicks in once adjusted net income reaches £50,000 and the clawback is tapered for earnings up to £60,000 when 100% of child benefit must be repaid.

The Chancellor has announced an increase in the clawback thresholds, effective from 6 April 2024. The point at which clawback begins will be raised from £50,000 to £60,000. The charge will then apply at the lower rate of 1% (currently 2%) of the full child benefit for each £200 of adjusted net income between £60,000 and £80,000.

This means that basic rate tax payers, with earnings under £50,270, will not be liable for the HICBC and will no longer need to file self assessment tax returns purely to pay the HICBC.

Example

A family with three children where the sole earner has adjusted net income of £60,000 will be better off in 2024-25 by £4,220 as a result of the changes to the HICBC and the reduction in national insurance contributions.

If you are claiming child benefit and you or your partner’s adjusted net income is between £50,000 and £80,000, contact us to discuss what this change will mean for you.