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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: Self Assessment: debt and return background: High Income Child Benefit Charge (HICBC)

Taxes act and background

Legislation in The Finance Act 2012 stipulates a new tax charge, the High Income Child Benefit Charge (HICBC), may apply to a Child Benefit (ChB) customer if they or their partner have an individual adjusted net income of over £50,000 a year, for the duration of all the claimant’s ChB payments.

Partner is taken to mean whom the ChB customer lives or lived with.

The ChB claimant or partner with the highest annual adjusted net income is affected.

The charge first comes into effect on 7 January 2013, the first self assessment year is for 2012-13 and the first balancing payment - payment on account will be due by 31 January 2014.

This applies to residents and non-residents.

Self assessment tax treatment

Where a HICBC arises it must be declared for tax reasons and it is mandatory to register for Self Assessment if not already registered. Self Assessment terms, time limits and regulations apply; for more information see the SA manual, SAM100060 and the Personal Tax HICBC Delivery page.

Note: You can check for HICBC self assessment criteria in SA MAINTAIN NOTES (as part of the registration process), customer NPS record, or from a filed / captured return.

DMB actions

As with any SA customer DMB can pursue these SA debts, returns and associated charges under business as usual procedures; for example campaigns (and campaign enablers) or enforcement.

Time to pay requests can be considered.

If appropriate handle as with other sensitive cases such as bereavement.

If the taxpayer disputes or queries Child Benefit they should be referred to the Child Benefit Office / PT Operations.

For confidentiality purposes, you should be aware that the SA customer and the ChB customer (claimant) may not be the same individual.