Child Benefit overpayments and the High Income Child Benefit Charge
Published 28 October 2026
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Who is likely to be affected
This measure impacts individuals who have received a Child Benefit overpayment and higher earners who are in scope of the £60,000 High Income Child Benefit Charge (HICBC) threshold.
General description of the measure
This measure offsets Child Benefit overpayments against HICBC payments made in relation to that overpayment.
The HICBC applies where Child Benefit recipients, or their partner, have, an adjusted net income of £60,000 or more. In the majority of cases, the Child Benefit recipient and HICBC taxpayer are not the same person.
The tax charge is currently tapered and increases gradually for those with income between £60,000 and £80,000. This is equal to one per cent of a family’s Child Benefit for every £200 of income that exceeds £60,000 in a tax year. Where income is above £80,000, the tax charge is equal to the total Child Benefit award.
In some instances, it is possible for the HICBC to have been charged and only later an overpayment of Child Benefit identified, in respect of the period for which the charge has been applied. In these circumstances HMRC must recover the overpaid Child Benefit and the individual who paid the HICBC must separately request a refund of the overpaid tax.
This measure avoids the need to both repay the Child Benefit overpayment and reclaim the HICBC in separate interactions with HMRC.
Where the HICBC paid does not cover the total Child Benefit overpayment received, arrangements will be made to recover the remaining overpayment.
Policy objective
This measure contributes to fairness in the tax system by ensuring that the correct amount of tax has been paid, whilst facilitating a smooth customer journey.
Background to the measure
This measure was announced and legislated for at Budget 2026.
Detailed proposal
Operative date
This measure will come into force on Royal Assent of Finance Bill 2026-27 and have retrospective effect from HICBC’s introduction in January 2013.
Current law
The High Income Child Benefit Charge is legislated for in Chapter 8 of Part 10 ITEPA 2003.
Child Benefit is legislated for in Part 9 of the Social Security Contributions and Benefits Act 1992, in the Social Administration Act 1992, Social Security Contributions and Benefits (Northern Ireland) Act 1992 and the Social Security Administration (Northern Ireland) Act 1992.
Proposed revisions
Legislation will be introduced to amend Chapter 8 of Part 10 ITEPA to include a provision that specifically relates to Child Benefit overpayments, enabling HMRC to offset the HICBC payment against the Child Benefit overpayment.
Summary of impacts
Exchequer impact (£million)
| 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 | 2030 to 2031 | 2031 to 2032 |
|---|---|---|---|---|---|
| negligible | negligible | negligible | negligible | negligible | negligible |
This measure is expected to have a negligible impact on the Exchequer.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure will impact Child Benefit claimants who have received an overpayment and individuals who have paid HICBC in relation to the period in which the overpayment was received (the Child Benefit recipient and HICBC taxpayer may be different individuals). Individuals may need to contact HMRC when they become aware of the overpayment of Child Benefit or they may be notified by HMRC when the overpayment is discovered.
This change will simplify their customer journey since an offset position will be available, which was not previously.
This measure is unlikely to impact family formation, stability and breakdown.
The impact on individuals and families depends on the amount of Child Benefit that is overpaid and if the amount can be offset or repaid. In cases where the individual is on the HICBC taper and the tax charge does not cover the full Child Benefit overpayment, HMRC will ensure that individuals are aware of the different ways they can repay the overpayment.
This measure will impact individuals experience of dealing with HMRC, since they will be able to offset a payment of HICBC against an overpayment of Child Benefit, rather than contact HMRC separately about both matters.
This measure does not affect an individual’s appeal rights in relating to a Child Benefit overpayment.
Equalities impacts
This measure impacts customers who have received a Child Benefit overpayment and higher earners who are in scope of the £60,000 HICBC threshold. This measure may apply to individuals regardless of their protected characteristics. If a protected group is estimated to be overrepresented in this population it is considered to be disproportionately impacted.
HICBC Payers
Individuals who are aged 35 to 54 are estimated to be overrepresented in the HICBC payer population (85%) compared to their prevalence in the UK adult population (31%). Males are also estimated to be overrepresented in this population (75%) compared to their prevalence in the UK adult population (49%).
Child Benefit Claimants
Individuals who are aged 25 to 54 are estimated to be greatly overrepresented in the Child Benefit claimant population (93%) compared to their prevalence in the UK adult population (46%). Females are also estimated to be overrepresented in this population (85%) compared to their prevalence in the UK adult population (51%).
Individuals from an Asian, Asian British, or a Black, African, Caribbean, Black British ethnic background are estimated to be slightly overrepresented in this population (9% and 5%, respectively) compared to their prevalence in the UK adult population (7% and 3%, respectively). Finally, individuals belonging to the Muslim faith are also estimated to be slightly overrepresented in the Child Benefit claimant population (8%) compared to their prevalence in the UK adult population (4%).
Where data was available there were no other protected groups overrepresented.
A full equality impact assessment is not recommended.
Administrative impact on business including civil society organisations
There will be no impacts on businesses and civil society organisations as this measure only affects individuals.
Operational impact (£million) (HMRC or other)
There are no operational impacts as a result of this measure.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be monitored through information collected from taxpayer data and customer feedback.
Further advice
If you have any questions about this change, contact the Income Tax Structure Team by email incometaxstructuremailbox@hmrc.gov.uk.