The High Income Child Benefit Charge (HICBC) affects parents where one partner (or both) have income in excess of £50,000 and either:
- you or your partner get Child Benefit or,
- 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 doesn’t matter if the child living with you is not your own child. ‘Partner’ means someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.
The HICBC is a progressive tax that effectively neutralises all or part of the Child Benefit you receive. If you or your partner have income over £50,000 a tax charge will be levied that recovers 1% of any child benefit you or your partner receive for every £100 your income exceeds £50,000. When your income exceeds £60,000 all of the Child Benefit will have been paid back. The charge will need to be declared and paid by the person with the highest income.
Parents whose income exceeded the £50,000 limit in the tax year to 5 April 2014, and one parent continued to receive Child Benefit, will need to submit a self assessment tax return to 5 April 2014 advising HMRC. If you find yourself in this position for the first time we can help you register for self assessment and submit a return online.
For parents with one or two incomes in excess of £60,000 it is possible to cancel your Child Benefit and thus avoid the HICBC. To do this file HMRC’s online request to not receive Child Benefit or call the Child Benefit Office – 0300 200 3100.