The threshold for earnings above which you have to pay back some or all of your child benefit will be increased from 6 April 2024 with a full overhaul of the regime promised in April 2026.

If you or your partner receive child benefit and your adjusted net income is above £50,000 you are liable to pay some or all the child benefit back via the high-income child benefit charge (HICBC). The HICBC kicks in once adjusted net income reaches £50,000 and the clawback is tapered for earnings up to £60,000 when 100% of child benefit must be repaid.

The Chancellor has announced an increase in the clawback thresholds, effective from 6 April 2024. The point at which clawback begins will be raised from £50,000 to £60,000. The charge will then apply at the lower rate of 1% (currently 2%) of the full child benefit for each £200 of adjusted net income between £60,000 and £80,000.

This means that basic rate tax payers, with earnings under £50,270, will not be liable for the HICBC and will no longer need to file self assessment tax returns purely to pay the HICBC.

Example

A family with three children where the sole earner has adjusted net income of £60,000 will be better off in 2024-25 by £4,220 as a result of the changes to the HICBC and the reduction in national insurance contributions.

If you are claiming child benefit and you or your partner’s adjusted net income is between £50,000 and £80,000, contact us to discuss what this change will mean for you.