High Income Child Benefit Charge: Important Changes for 2024/2025

Significant changes to the High Income Child Benefit Charge (HICBC) are coming into effect from 6 April 2024. These adjustments will provide relief to many families currently affected by the charge and extend the income threshold at which it applies.

Key Changes to Income Thresholds

The income threshold for HICBC is increasing from £50,000 to £60,000. This means if your adjusted net income is below £60,000, you'll no longer be subject to the charge. For those earning between £60,000 and £80,000, the tax charge will be calculated at a reduced rate compared to previous years.

How the New Calculations Work

For individuals earning between £60,000 and £80,000, the charge will now increase by 1% of the Child Benefit for every £200 of income above £60,000. This is half the previous rate, resulting in a more gradual reduction of benefits. Those earning above £80,000 will see their Child Benefit fully clawed back through the tax charge.

What This Means for Families

These changes represent significant savings for many families. Let's look at a practical example:

Consider a parent earning £55,000 with two children. Under the old rules, they would have needed to repay 25% of their Child Benefit (as they earned £5,000 over the previous £50,000 threshold). With Child Benefit currently at £24.00 per week for the first child and £15.90 for the second child, this would have meant:

• Annual Child Benefit received: £2,075.20 (£1,248 for first child + £827.20 for second child)
• Previous HICBC charge (25%): £518.80
• Net benefit received: £1,556.40

Under the new rules, as their income falls below the £60,000 threshold, they'll keep their full Child Benefit amount of £2,075.20 - a saving of £518.80 per year.

Action Points

To understand exactly how much Child Benefit you might receive or need to repay, you can use the HMRC Child Benefit Tax Calculator. This tool will help you make an informed decision about your Child Benefit claims.

If you've previously opted out of receiving Child Benefit due to the HICBC, you may want to reconsider your position under these new thresholds. Remember, even if you don't claim the payment, registering for Child Benefit can help protect your State Pension and ensure your child receives their National Insurance number automatically.

Need help understanding how these changes affect your specific situation? Contact our team at This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01474 619 990 for personalised guidance.