Tax credits and benefits
This section talks you through how to claim child benefits and the high income child benefit charge (HICBC).
What is child benefit?
Child benefit is a non-means-tested benefit payable for each child. You can get child benefit no matter what your income, but see below for the high income child benefit charge if your income is high.
There are two separate amounts, with a higher amount for your eldest (or only) child. You get £21.05 a week for your eldest child and £13.95 a week for each of your other children.
Who can claim child benefit?
If you are responsible for a child or qualifying young person, you can normally claim child benefit. The rules can be complex around who has responsibility for a child. You can find out more on the GOV.UK website.
What is the high income child benefit charge (HICBC)?
You may be liable to a tax charge if you, or your partner, have an individual income of more than £50,000 and one of you gets child benefit or contributions towards the upkeep of a child.
Who is affected?
Households where a person gets child benefit and where their or their partner’s annual income is at least £50,000.
How does HICBC work?
If you continue to receive child benefit and your income (or your partner’s income) is above £50,000, then you will have to pay the tax charge.
If your income is between £50,000 and £60,000, then the tax charge is less than the full amount of child benefit and increases gradually to 100% as income reaches £60,000 and over. For every £100 of income over £50,000, the liable taxpayer must pay 1% of the value of the child benefit payments for the year.
You can use the HMRC calculator on GOV.UK to estimate the tax charge.
What counts as income?
When working out if your income is £50,000 or more, you need to calculate your ‘adjusted net income’. You can find out how to calculate this on the GOV.UK website.
One of us has income above £50,000 – what do we do?
You have two choices. You can:
- continue to receive child benefit and pay the tax charge, or
- stop receiving payments of child benefit so you do not have to pay the tax charge.
My partner earns over £50,000 but the child benefit claim is in my name – which of us pays the HICBC tax charge?
The person who has income of £50,000 or over will be responsible for the tax charge.
If you both earn at least £50,000, then whoever of you earns the higher amount is liable for the tax charge.
What about National Insurance credits?
If you are affected by HICBC and decide you want to stop child benefit payments, you still remain entitled to child benefit and so your National Insurance credits will be protected. If you have another child, you should still claim child benefit for them even if you choose not to receive payments. This is to protect National Insurance credits you receive when you claim child benefit for a child under 12.
How do I tell HMRC that I want to stop getting child benefit?
You should tell HMRC using their online form. The form is available on the GOV.UK website.
Only the person who gets child benefit (or their appointee) can tell HMRC to stop the payments.
What if I choose to carry on getting child benefit?
You need to declare the payments on your Self Assessment return so that HMRC will apply the HICBC tax charge.
What if I am not registered for Self Assessment?
You need to register with HMRC for Self Assessment as soon as possible but at the latest by 5 October after the end of the tax year in question. Ensure you complete your return by the annual deadlines, normally 31 October for paper filing and 31 January if doing it online. If you do not register by the deadline or do not send in your tax return by the relevant deadline, you may be charged a penalty.
You can pay the charge as a lump sum through the Self Assessment system. Alternatively, HMRC can adjust your tax code to cover the HICBC. You will still need to complete a Self Assessment form even if you want to pay by having your tax code adjusted.
What happens if my circumstances change?
Provided you have claimed child benefit, you can re-start payments at any time while you still have your underlying entitlement. So, if circumstances change, for example income changes or partner moves in or out, tell HMRC to make sure any payments that you are entitled to or tax that you need to pay are correct. Guidance on what changes to notify and what steps to take can be found on the GOV.UK website.
This page provides a very brief overview of the HICBC.
More detailed information and guidance about what steps to take is available on the child benefit pages of the GOV.UK website. There is also a calculator tool to help people estimate the amount of their new tax charge on GOV.UK.