Child Benefit claimants with an income of over £60,000 per year face extra tax charges (Image: Getty)
HM Revenue and Customs (HMRC) has issued a tax warning to households claiming Child Benefit that have received a pay rise this April.
The government department has warned that claimants who exceed an income threshold of £60,000 per year will be hit with extra tax charges, as some – or all – of your Child Benefit will have to be paid back. Child Benefit can be claimed by parents or carers who are responsible for raising a child under the age of 16, or under 20 if they stay in approved education or training. The benefit is paid every four weeks and as of April 6, it now gives parents £27.05 per week for their first child, and £17.90 for any additional children – an annual increase of £52 and £33.80 respectively.
Under the new April rates, it means parents with one child can get £1,406.60 per year, while those with two children can get an additional £930.80, giving them £2,337.40 in total annually. But there’s no limit – other than the Benefit Cap – which means if you have three or four children, you could get even more.
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But in cases where parents have an income of more than £60,000 a year, you may be subject to pay the High Income Child Benefit Charge (HICBC).
So if you’ve had a pay rise this month, it could be the case that your new wage pushes you above this income threshold and means you’ll face an extra tax charge as a result.
In a warning to claimants on X on Sunday (April 19), HMRC said: “Attention parents! Recently had a pay rise? If you’re now earning over £60k and you get Child Benefit you may need to pay some of it back.
“You can use the new High Income Child Benefit Charge service if you don’t already complete Self Assessment. For more information, search “High Income Child Benefit Charge” on http://GOV.UK or click the link below.”
The HICBC applies if either you or your partner receives Child Benefit and at least one of you earns more than the £60,000 threshold. In this case, you will have to pay some of your Child Benefit back at a rate of 1% for every £200 you earn above the threshold.
If you or your partner earn £80,000 or more, then you will have to pay all of the Child Benefit back to HMRC.
If your adjusted net income is over the threshold and so is your partner’s, then whoever has the higher income is responsible for paying the tax charge. ‘Partner’ refers to someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.
HMRC explains: “If you or your partner earn more than £60,000 a year, you’ll have to pay some of your Child Benefit back. If you or your partner earn £80,000 or more, you’ll have to pay all of it back.
“You’ll pay back 1% of your Child Benefit for every £200 you earn over the threshold. Example: Your adjusted net income is £67,600 in tax year 2024 to 2025. This is £7,600 over the £60,000 threshold. As 7,600 divided by 200 is 38, you’ll pay back 38% of your Child Benefit.”
If your income exceeds the threshold, you can choose to either get Child Benefit payments and pay the tax charge, or opt out of getting payments and not pay the tax charge. If you do opt to pay the tax charge, this can be done through your PAYE tax code or through Self Assessment.
