Child Benefit can be a valuable source of support for families. But if you or your partner earns over a certain amount, you may have to pay some — or all — of it back through the High Income Child Benefit Charge.
It’s one of those tax rules that can catch people out, especially where one parent claims Child Benefit but the other parent is the higher earner.
So, how does it work? And is there anything you can do to reduce the charge?
What is the High Income Child Benefit Charge?
The High Income Child Benefit Charge, often shortened to HICBC, applies where you or your partner has adjusted net income of £60,000 or more in a tax year.
For every £200 of income over £60,000, you pay back 1% of the Child Benefit received.
Once adjusted net income reaches £80,000, the charge equals the full amount of Child Benefit for the year. In other words, all the Child Benefit is effectively paid back.
For 2026/27, Child Benefit is:
- £27.05 per week for the eldest or only child
- £17.90 per week for each additional child
Why you should still register for Child Benefit
Some families choose not to receive Child Benefit payments because they know they’ll have to pay them back later.
That can make sense from a cash flow point of view. However, it’s still important to register for Child Benefit.
Why? Because registering can help protect your National Insurance record, particularly if one parent is not working or is earning below the level needed to build up a qualifying year for State Pension purposes.
This is especially important for stay-at-home parents.
An example of how the charge works
Let’s say Jade and Liam have two children.
In 2026/27, they receive Child Benefit of £44.95 per week. That’s £2,337.40 for the year.
Jade is a stay-at-home parent and claims the Child Benefit. Liam has adjusted net income of £70,000.
Because Liam’s income is £10,000 over the £60,000 threshold, the family has to pay back 50% of the Child Benefit received.
That means Liam would face a High Income Child Benefit Charge of £1,168.70.
It doesn’t matter that the Child Benefit is paid to Jade. The charge applies to Liam because he is the higher earner.
What is adjusted net income?
The charge is based on adjusted net income.
Put simply, this is your total taxable income before personal allowances, less certain deductions such as:
- Pension contributions
- Gift Aid donations
- Trading losses
This figure is important because small changes can make a big difference.
For example, if your income is just over £60,000, reducing your adjusted net income could mean you keep more of your Child Benefit.
How can you reduce the charge?
There are a few options worth considering.
- Equalise income where possible
The charge is based on individual income, not household income.
This can create some unfair results.
For example, a couple where both parents earn £60,000 each could have household income of £120,000 and keep all their Child Benefit.
But a couple where one parent earns £80,000 and the other does not work could lose all of it.
Where practical, couples may want to think about whether income can be shared more evenly. This could involve reviewing working hours, business income, salary levels or pension planning.
Of course, every family’s situation is different, so it’s important to take advice before making changes.
- Make pension contributions
Pension contributions can reduce adjusted net income.
This means they may also reduce, or even remove, the High Income Child Benefit Charge.
For example, Lucy and Olly have four children and receive £4,199 in Child Benefit in 2026/27.
Lucy has adjusted net income of £50,000. Olly has adjusted net income of £75,000.
Without planning, the family would lose £3,149.25 of their Child Benefit through the charge.
However, if Olly makes a pension contribution of £15,000, this reduces his adjusted net income to £60,000. As a result, the family is no longer caught by the charge.
This can be a useful planning opportunity because the money goes into Olly’s pension rather than being paid back as tax.
- Make Gift Aid donations
Gift Aid donations can also reduce adjusted net income.
If you already give to charity, or you’re thinking about doing so, Gift Aid may help reduce the High Income Child Benefit Charge.
It’s important to keep proper records of any Gift Aid donations, as these may need to be included on your tax return.
Don’t get caught out
The High Income Child Benefit Charge can be frustrating, especially for families where only one parent earns over the threshold.
However, with the right planning, you may be able to reduce the charge and keep more of your Child Benefit.
Pension contributions, Gift Aid donations and income planning can all make a difference.
If you’re unsure whether the charge applies to you, or you’d like help working out the best approach, please get in touch with Jon or the team at Jon Davies Accountants.
We’ll help you understand your position and make sure you’re not paying more tax than you need to.
If you found this useful, please share it using the icons at the side of the page, or leave a comment below.
Any questions?
If you’d like a meeting or a video call to discuss this, please get in touch with your favourite Liverpool accountant
- You can ring us on 0151 380 8080
- You can email us at gr****@*********************co.uk