If you or your partner earn over £50,000, you may be subject to the high income Child Benefit tax charge. You can check whether you are over the £50,000 limit on the Gov.UK website page about High Income Child Benefit Tax Charge.
The amount of Child Benefit you can claim and receive is not affected. It can still be paid to you or your partner even if one of you will then have to pay the income tax charge.
How much is the charge?
The amount of the charge will depend on how much over £50,000 your adjusted net income for Income Tax is:
- If your income is between £50,000 and £60,000, the income tax charge will be 1% of your Child Benefit for every £100 of income between £50,000 and £60,000. The charge will never be more than the amount of Child Benefit you receive.
- If your income is over £60,000, the charge will be equal to the full amount of your Child Benefit so you are no better off for receiving the benefit.
Couples can have a combined income of up to £100,000 and not be affected, as long as neither of them has an individual income of over £50,000. For example, if two members of a couple are each earning £45,000 they will not be affected by this income tax charge.
Any charge you have to pay will be based on your adjusted net income for Income Tax – that is, your taxable income after any allowable reliefs you may be able to claim (such as reliefs for pension contributions or charitable donations). You can find out how to work out your adjusted net income on the GOV.UK website.
The Gov.UK website has a Child Benefit Tax Calculator and also has information about the various sorts of Income Tax reliefs you may be able to claim.
How is the charge paid?
The charge is paid through a self-assessment tax return. It is your responsibility to make sure that you pay this tax even if you are not contacted by HMRC.
You can decide not to receive Child Benefit payments if you do not wish to pay the charge and can change your mind at any time.
You will remain entitled to Child Benefit, even if you choose not to have it paid. This is in order to protect your entitlement to national insurance credits (Carer’s Credits), which can count towards your State Retirement Pension entitlement.
If you have a baby or become responsible for a child or young person, you may decide you do not want to receive Child Benefit because you do not want to pay the tax charge. You should still make a claim for Child Benefit to protect your entitlement to national insurance credits should you need them. You can say on the form that you do not want to receive payment.
Reviewed: May 2022