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HMRC internal manual

Claimant Compliance Manual

From
HM Revenue & Customs
Updated
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Child Benefit and Tax Credits: High Income Child Benefit Charge (HICBC)

A High Income Child Benefit Charge (HICBC) occurs when either the Child Benefit customer or their partner has an individual income of more than £50,000 a year, then the person with the higher income may be liable to pay a HICBC on some, or all, of the Child Benefit (ChB) entitlement.

If these changes apply, the customer and their partner should jointly decide whether to stop getting ChB payments and not have to pay a tax charge, or continue getting ChB payments and declare them for tax purposes.

The tax charge applies at a rate of 1% of the ChB paid for every £100 of income over £50,000. If the customer or their partner has an individual income between £50,000 and £60,000 the tax charge will be less than the total amount of ChB, so they may decide to keep getting ChB payments and declare them for tax purposes.

If the customer or their partner has an individual income of more than £60,000 the tax charge will be equal to the total amount of ChB they are entitled to, so they may decide to stop receiving ChB payments and not have to pay a tax charge.

Although customers can decide not to be paid ChB, they still have entitlement to ChB unless, due to a change of circumstances, entitlement conditions are no longer satisfied. They should therefore continue to notify us of any relevant change of circumstances.

Only the ChB customer or someone with the appropriate authority to act on the customer’s behalf can decide not to receive or to start getting payments. If the customer’s partner is the person with the income over £50,000 it is the partner who is liable to the tax charge not the customer. Where both the customer and their partner have an income over £50,000, the person with the highest income will be liable to the tax charge.