The clawback threshold for the high-income child benefit charge (HICBC) was increased to £60,000 from 6 April 2024.
If you are entitled to child benefit and your or your higher-earning partner’s adjusted net income (ANI) is above £60,000 it is possible that you will have chosen not to receive your child benefit payments as the full amount would previously have been clawed back via the HICBC.
As announced in Spring Budget 2024, the point at which that charge kicks in has been increased from £50,000 to £60,000. The rate of the charge has been reduced so that 1% of child benefit is repayable for every £200 of ANI over the threshold (previously 1% per every £100). This means child benefit is paid back in full when ANI reaches £80,000 (previously £60,000).
Taxpayers who have chosen not to sign up for child benefits, or opted out of receiving the payments, whose ANI is between £60,000 and £80,000 should consider restarting, or signing up for, child benefit payments.
Where the higher earning parent or guardian has adjusted net income above £80,000 there will be no benefit to receiving payments. However it is often advisable to sign up for child benefit and opt out of payments as this will protect your entitlement to state benefits. Where the higher earner’s ANI is between £50,000 and £60,000 they will now keep 100% of their child benefit and are no longer required to deal with the HICBC. Individuals with ANI between £60,000 and £80,000 who decide to opt back into receiving (or sign up for) child benefit will need to notify HMRC of their liability to the HICBC via self assessment. Where the higher earning parent or guardian has adjusted net income above £80,000 there will be no benefit to receiving payments. However it is often advisable to sign up for child benefit and opt out of payments as this will protect your entitlement to state benefits.
If your or your partner’s adjusted net income is between £60,000 and £80,000 contact us to discuss the most efficient next steps for you.
