UK Households to Repay Child Benefit Under High Income Charge
HMRC to claw back £1,406 from thousands of UK households
Image: Birmingham Live
Thousands of UK households will face repayments of £1,406 in Child Benefit due to the High Income Child Benefit Charge (HICBC). The charge applies to parents with an adjusted net income exceeding £60,000, tapering off completely at £80,000. This tax system adjustment affects both parents' earnings and can apply even if the child is not biologically theirs.
- 01The High Income Child Benefit Charge (HICBC) affects parents earning over £60,000, with full repayment at £80,000.
- 02For every £200 earned over the threshold, 1% of Child Benefit must be repaid.
- 03The Child Benefit amount is £1,406 annually for eligible claimants.
- 04Adjusted net income includes total taxable income before Personal Allowances and after specific tax reliefs.
- 05The individual with the higher income is responsible for repaying the charge if both partners exceed the threshold.
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The HM Revenue and Customs (HMRC) is set to reclaim £1,406 from many UK households under the High Income Child Benefit Charge (HICBC). This charge applies to parents whose adjusted net income exceeds £60,000. The repayment system is structured so that for every £200 earned over this threshold, 1% of the Child Benefit must be repaid. Once income reaches £80,000, the entire benefit must be returned. The Child Benefit, which is available to eligible claimants, can also be affected if someone else claims it for a child living with the household. To determine if you are liable for the charge, you need to calculate your adjusted net income, which includes all taxable income, savings interest, and dividends, before accounting for Personal Allowances and certain tax reliefs. If both partners exceed the income threshold, the partner with the higher income is responsible for repaying the charge. The HICBC aims to ensure that Child Benefit is targeted towards families with lower incomes.
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This change will affect many families' finances, especially those with higher earners, as they may need to budget for the repayment of Child Benefit.
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