What changed in April 2024
HICBC was widely loathed for its low £50,000 threshold (unindexed since 2013) and steep 1% per £100 taper that hit moderate-income families with marginal rates over 60%.
The 2024 reform lifted both ends:
• Threshold raised from £50,000 to £60,000 of adjusted net income • Taper softened to 1% per £200 (was 1% per £100) • Full clawback now at £80,000 (was £60,000)
Result: families earning between £50K and £60K who used to lose part of their benefit now keep all of it. Families between £60K and £80K lose less. Families above £80K lose all of it (same as before).
The charge still applies to the HIGHEST earner only. Household income doesn't matter.
How HICBC is calculated
Child Benefit pays £26.05/week for the first child + £17.25/week for each subsequent child (2025/26 rates). For a 2-kid family that's ~£2,250/year, paid every 4 weeks to the nominated carer.
If any individual in the household has adjusted net income (ANI) above £60,000:
Step 1: identify the higher-ANI parent. Step 2: HICBC = (ANI - £60,000) / £200 × 1% × annual Child Benefit, capped at 100%.
Worked examples (2-kid family, annual benefit ~£2,250):
• ANI £65,000: £25,000 × 0% / £15K = £5K excess / £200 = 25% clawback. HICBC = £563. Family keeps £1,687. • ANI £70,000: £10K excess / £200 = 50%. HICBC = £1,125. Family keeps £1,125. • ANI £75,000: 75% clawback. HICBC = £1,688. Family keeps £563. • ANI £80,000+: 100%. Family keeps £0 of net benefit.
Couple maths: why two £55K earners win
HICBC is a per-individual charge, not household. Compare two families both with £110K combined household income, two kids:
Family A: £110K single earner + £0 spouse • ANI of higher earner: £110,000 • Even though £110K > £80K, HICBC is capped at 100% of benefit • Net benefit kept: £0
Family B: £55K + £55K earners • Higher earner ANI: £55,000 • £55K is below £60K threshold • HICBC = £0 • Net benefit kept: £2,250/year
Same household income, but Family B keeps £2,250 more per year. This is the strongest income-splitting incentive in UK tax. Pension salary sacrifice for the higher earner can reduce ANI below £60K and recover the benefit - sacrifice £15K to drop from £75K to £60K and you save £1,688 of HICBC plus £6K of higher-rate tax = £7,688 effective relief on a £15K sacrifice.
Should you stop claiming?
There are two parts to "claim Child Benefit":
1. Register the claim (always do this) 2. Opt to receive the cash (optional)
If the higher earner is over £80K, the cash is fully clawed back via HICBC. You can opt out of receiving the payments while still keeping the registration active. This avoids the hassle of paying HICBC via Self Assessment.
BUT - always register the claim, even if opting out of payments. Reason: the carer (lower earner / non-earning parent) gets National Insurance credits towards state pension for years they care for a child under 12. Without the registered Child Benefit claim, those NI credits are lost - potentially costing thousands in state pension over a lifetime.
Specific case: stay-at-home parent with no PAYE. If they don't register the claim, they get no NI credits and may end up with a partial state pension. Register but opt-out-of-payments is the right move.
PAYE option new for 2025-26
Until 2025-26, HICBC was settled via Self Assessment - meaning every PAYE-earning higher earner with kids had to register for Self Assessment, file a tax return, and pay HICBC as a one-off bill.
From April 2025, HMRC introduces a PAYE option: HICBC can be deducted directly from your salary via the tax code, like other benefits. You opt in via gov.uk; HMRC issues an updated tax code that recovers the HICBC across the year as a small monthly tax adjustment.
Who should use PAYE option: • Stable income, fully PAYE • Don't want to file Self Assessment just for HICBC
Who should stick with Self Assessment: • Variable / bonus-heavy income (PAYE estimate may be wrong, then you owe a balancing payment anyway) • Already filing Self Assessment for other reasons (rental, dividends, side income) • Want to make pension top-ups in March that affect ANI - easier to true up via SA
Switching is not retroactive - you'll still need a 2024-25 Self Assessment for that year.
Run the math for your situation
Use our 🇬🇧 UK calculator to plug in your own numbers and see exactly what you owe / save.