Published: June 2026 | Fact-Checked & Audited By: David Vance, CTA FCA (Chartered Tax Advisor & Accountant)
This guide is fully updated for the 2026/27 HMRC tax year. All calculations and tax rules have been audited against official UK legislation.
Child Benefit is a critical source of support for parents in the UK, helping cover the everyday costs of raising children. However, for middle and high earners, this benefit comes with a major catch: the High Income Child Benefit Charge (HICBC). If you or your partner earns over a specific threshold, you are subject to a tax charge that claws back a portion or all of your child benefits. In this guide, we break down how the Child Benefit tax trap works, explain the tapering thresholds, and show you how to legally reduce your liability.
The High Income Child Benefit Charge (HICBC) Thresholds
For the 2026/27 tax year, the income thresholds for the Child Benefit tax charge are as follows:
- Under £60,000: If both partners earn under £60,000, you retain 100% of your Child Benefit payments tax-free.
- Between £60,000 and £80,000: If either partner’s adjusted net income is in this bracket, the charge applies. The benefit is clawed back at a rate of 1% of the benefit for every £200 of income above £60,000.
- Over £80,000: If either partner earns over £80,000, the charge is equal to 100% of the benefit, meaning the entire Child Benefit is effectively taxed away.
Child Benefit Clawback Example
To see how the clawback scales, let’s look at a family with **two children** (receiving £1,300 in annual Child Benefit) where the highest-earning partner has a gross salary of £70,000:
- The income exceeds the £60,000 threshold by £10,000 (£70,000 – £60,000).
- We divide the excess by £200 to find the percentage charge: £10,000 ÷ £200 = 50% charge.
- The tax charge is 50% of the total benefit: 50% of £1,300 = £650.00.
- The family keeps a net benefit of £650.00 after paying the tax charge via their annual Self Assessment return.
How to Keep Your Child Benefit Legally
The HICBC is based on your Adjusted Net Income, not your gross salary. This distinction is critical because adjusted net income is calculated after deducting pre-tax pension contributions and Gift Aid donations. If either partner earns slightly over the £60,000 threshold, they can increase their pension contributions (via salary sacrifice or SIPP payments) to lower their adjusted net income back to £60,000. This avoids the tax charge entirely while building long-term retirement wealth.
To calculate your High Income Child Benefit tax charge and see how pension contributions can lower your liability, use our Child Benefit Tax Calculator.
Frequently Asked Questions (FAQ)
Q: Does the tax charge apply if the parent receiving the benefit doesn’t earn over £60,000?
A: Yes. The tax charge is always levied on the partner with the highest adjusted net income, regardless of who actually receives the Child Benefit payments into their bank account. This applies even if the highest earner is not the biological parent of the children but lives in the same household.
Q: Should I opt out of Child Benefit payments if I earn over £80,000?
A: If you earn over £80,000, you have two choices: you can claim the benefit and pay it all back via Self Assessment, or you can opt out of receiving the payments to avoid filing a tax return. However, even if you choose to opt out of the cash payments, **you should still fill out the Child Benefit claim form**. Submitting the form ensures you secure National Insurance credits (crucial for your State Pension) and automatically issues your child with a National Insurance number at age 16.
Q: What happens if both partners earn over £60,000?
A: The partner with the highest income is liable for the HICBC. The incomes are not pooled. For example, if both partners earn £65,000, only the partner with the higher adjusted net income pays the 25% tax charge. If one partner earns £80,000 and the other earns £30,000, the partner earning £80,000 pays the 100% tax charge.
Q: How do I pay the High Income Child Benefit Charge?
A: If the charge applies to you, you must register for Self Assessment and file an annual tax return. The tax owed is paid as part of your overall Self Assessment tax bill by January 31st following the end of the tax year.