The High Income Child Benefit Charge (HICBC) has meant that thousands of people have had to submit self assessment tax returns, even when they had no other reason to fill one out.
Initially announced in the 2025 Spring Statement, HMRC has introduced a simpler option: to pay the charge directly through a tax code instead.
What is the High Income Child Benefit Charge?
The High Income Child Benefit Charge (HICBC) is a tax charge on Child Benefit payment. When an individual or their partner earns over the £60,000 threshold, and one of them claims Child Benefit, they will become subject to HICBC.
The charge increases gradually at 1% of the Child Benefit for every £200 earned over the threshold until income hits £80,000, at which point the entire Child Benefit amount is paid back.
What are the changes to HICBC payments?
HMRC now allows HICBC to be paid through PAYE by adjusting an individual’s tax code. Employers then deduct the charge from salary throughout the year, the same as income tax.
Paying HICBC through PAYE removes the burden of filing a self assessment return for those who wouldn’t otherwise need to.
To pay HICBC through PAYE, an individual must notify HMRC on or before 31 January in the year following the tax year in question. Missing this deadline will mean that they default back to self assessment.
For example:
If you owe HICBC for the 2025/26 tax year (starting 6 April 2025), you have until 31 January 2027 to opt into the PAYE route.
Making the switch to HICBC payment through PAYE
The exact process depends on an individual’s current situation. Individuals who don’t currently file a self assessment return will need to log into HMRC with their Government Gateway account and provide the required information.
HMRC will adjust their tax code, and the charge gets collected automatically through salary.
Those who file a self assessment solely for the purposes of paying HICBC will need to contact HMRC by phone, ask to be removed from self assessment, and register to make payments through PAYE instead.
Full details on the process of changing from self assessment to PAYE, and the information required to do so, can be found on the gov.uk website.
How Ormerod Rutter can help
If you’re not sure whether you’re liable for HICBC, confused about how the charge is calculated, or want advice on the best approach for your family, we’re here to help.
Get in touch on 01905 777600 or email hello@ormerodrutter.co.uk, and we’ll help you to navigate the options and make sure you’re set up in the most efficient way possible.
