What you need to know about the High Income Child Benefit Charge
Posted on 27th July 2023
You’ll receive monthly Child Benefit at £24 per week for your first child and £15.90 for your other children. This applies until the August after they are 16. The payments contribute to your benefit cap, which is he maximum benefit you can receive.
While you’re receiving Child Benefit you’ll also qualify for National Insurance (NI) credits if you aren’t paying through PAYE, for example. This will keep your State Pension contributions up to date. You’ll also qualify for other benefits like Jobseeker’s Allowance.
If your earnings are over £50,000
The High Income Child Benefit Charge applies if you or your partner has ‘adjusted net income’ over £50,000 a year.
Adjusted net income is your total taxable income before personal allowances and less things like Gift Aid. This includes interest from savings and dividends. If you’re affected you can work out what you must pay using the Child Benefit tax calculator.
The Charge won’t be more than the Child Benefit payments and you’ll still receive National Insurance credits and other benefits.
If you and your partner both have income over £50,000, the highest earner is responsible for paying the Charge. If either of you has income over £60,000, the Charge will be equivalent to all your Child Benefit payments.
To pay the Charge you must fill in a self assessment tax return, even if you don’t normally complete one. You must register by 5 October after the tax year in which the Charge applies. Your tax return must be submitted by 31 January each year, along with your payment.
HMRC can charge a penalty if you don’t register for self assessment or declare child benefit on your tax return.
Opting out of Child Benefit payments
Alternatively, you can opt out of Child Benefit payments using the Government Gateway. To receive NI credits, you’ll still have to complete the claim form saying you don’t want to receive the payments.
You can restart your Child Benefit payments later by filling in a claim form online or contacting the Child Benefit Office on 0300 200 3100 with your NI number. The process uses speech recognition software, so you will be asked why you’re calling HMRC. You’ll be asked some security questions so check that your Government Gateway account is up to date before calling. It can take up to 21 days for your payments to start.
If your income changes
If you or your partner’s adjusted income falls below £50,000 you can use the Child Benefit tax calculator to find out it this affects your Charge.
Your position could change if you move in with someone or if a relationship breaks down. This would apply from the time you move in together or from the time you move out.
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