The 2024 Spring Budget announced changes to the High Income Child Benefit Charge (HICBC). We wanted to write more about this to help you understand how it works, as there are many misconceptions about it.

The High Income Child Benefit Charge (HICBC) is a tax charge that applies to higher earners who receive Child Benefit or whose partner receives it.

You may have to pay the HICBC if:

• You or your partner get Child Benefit
• Someone else gets Child Benefit for a child living with you, and they contribute at least an equal amount towards the child's upkeep.

It does not matter if the child living with you is not your own child.

Changes announced in Spring Budget 2024

The government is increasing the income threshold at which HICBC starts to be charged from £50,000 to £60,000 from April 2024.

• The rate at which HICBC is charged will be halved from 1% of the Child Benefit payment for every additional £100 above the threshold to 1% for every £200.

• This means that Child Benefit will not be withdrawn in full until individuals have ‘adjusted net income’ of £80,000 or more.

The government estimates that 485,000 families will gain an average of £1,260 towards the cost of raising their children in 2024/25, while 170,000 families will be exempt from paying the tax charge.

In addition, the government plans to administer the HICBC on a household rather than individual basis by April 2026, with a consultation in due course.

The impact on households claiming child benefit

This tax can be very confusing to understand, and many people have been caught up in not paying the correct amount of tax. The announcement made in Spring about the changes was supposed to increase fairness by making this a household tax rather than applying it to individual taxpayers.

To determine if your income is over the threshold, you will need to calculate your 'adjusted net income'.

Your adjusted net income is your total taxable income before any allowances, not including things like Gift Aid. Your total taxable income includes interest from savings and dividends.

If partners within one household do not share information about their finances, inaccurate tax returns can be submitted. Also, difficulties can arise if partners separate during a tax year and need to make adjustments for their time together.

The main misconception is many taxpayers think HMRC will tell them if they fall into this tax, this is not the case, and it is up to the taxpayer to keep a close eye on their income to assess whether they are caught up in the tax

This article gives examples of different scenarios that can occur and how these have been dealt with legally – High Income Benefit Charge: common misconceptions.

Hopefully, this helps, but if you are still struggling to understand how this will affect you, then please do contact us by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it.