High Income Child Benefit Charge, explained

What is HICBC?

Child Benefit is a flat weekly amount paid to every parent regardless of income. £27.05for the eldest child and £17.90 for each younger child in 2026/27. Since 2013, HMRC has made some or all of it repayable from higher-earning households via a separate income-tax charge: the High Income Child Benefit Charge.

From April 2024, the thresholds increased. The charge now starts at £60,000 of adjusted net income and reaches 100% at £80,000. So the £20,000 band between those two figures is where you progressively lose the benefit at 1% per £200 of income above £60,000.

The maths in detail

The charge is 1% of the year's Child Benefit for every £200 of adjusted net income between £60,000 and £80,000. So:

• £60,000 or below. No charge. You keep all the Child Benefit.
• £70,000. 50% repayable through HICBC. You keep half.
• £80,000 or above. 100% repayable through HICBC. The charge equals the entire annual Child Benefit.

Above £80,000 the charge plateaus. Earning more does not make the charge bigger. So the £60k to £80k band is the zone where each complete £200 above £60,000 adds 1% of your annual Child Benefit to the charge, on top of normal income tax and NIC.

What is “adjusted net income”?

This is the tax-tech term that does all the work. It is roughly: total taxable income, minus pension contributions, minus Gift Aid donations (grossed up). What it includes:

• Salary, bonuses and any taxable benefits-in-kind.
• Self-employment profit.
• Rental income, dividends, savings interest above the allowance.
• Most pensions (state and private).

What it does not include:

• Gross personal pension contributions (relief at source or net pay).
• Salary sacrificed into a pension. It never hits taxable pay in the first place.
• Charitable donations (Gift Aid grossed up at 25%).
• Trading losses brought forward.

Reducing the charge with pension contributions or Gift Aid

Adjusted net income is what triggers the charge. In many cases, pension contributions or Gift Aid can reduce or remove the charge by reducing adjusted net income. A common lever is a pension contribution, especially where it fits your wider circumstances.

1. If you earn £72,000 and want to escape the charge entirely, you need to bring ANI to £60,000 or below. That is a £12,000 gross pension contribution.
2. If salary sacrifice is available, that £12,000 goes in tax free and NIC free. Costs you about £6,960 of net pay.
3. The £12,000 lands in your pension. The £1,402.44 of HICBC is wiped out under these simplified assumptions. You also keep the value of any personal allowance you might have lost separately if you are heading towards £100k.

For a parent of two earning in the £60k to £80k zone, the HICBC repayment adds about 11.7% of marginal cost under 2026/27 rates. For a higher-rate employee, that can mean roughly 40% income tax + 2% employee NI + 11.7% HICBC, or about 53.7% before any student loan effects. Student loan repayments can increase the effective marginal deduction further.

Should I just stop claiming Child Benefit?

You can opt out of the cash payment but still register your child for Child Benefit. That is the right move if your income is going to be persistently above £80,000. You avoid some payment admin if the charge would otherwise apply.

But register for the benefit regardless. Registering protects:

• Your State Pension qualifying years (Class 3 NIC credits attach to the parent at home with the child).
• Your child's automatic enrolment in the National Insurance number system at age 16.

Failing to register costs more than the charge in the long run. Tick the “don't pay me” box, not the “don't register” box.

Common mistakes

• Assuming household income matters. It does not. Two earners on £55k each pay nothing. One earner on £80k pays the lot.
• Assuming there is only one payment route. If you owe HICBC, you may need to pay it through PAYE or Self Assessment depending on your circumstances. Check your Personal Tax Account or HMRC guidance.
• Paying salary sacrifice but not telling HMRC. If your code still reflects pre-sacrifice salary, you might trigger the charge on paper. Update your personal tax account.
• Confusing HICBC with the 60% trap. These affect different income bands. The HICBC charge has already reached the full Child Benefit amount at £80,000, so it does not add another marginal charge when the personal allowance taper starts above £100,000. Pension contributions and Gift Aid may reduce either charge by lowering adjusted net income, depending on the amount and your circumstances. See HMRC's HICBC thresholds.

Bottom line

HICBC is a tax charge linked to Child Benefit. It uses the higher earner's adjusted net income, not household income, and it may be reduced with pension contributions or Gift Aid. If your income lives between £60k and £80k and you have kids, redirecting some of your salary into pension can be powerful if it fits your goals and employer scheme rules. You may keep more Child Benefit, save income tax, save NIC if you sacrifice, and build pension savings for later.

Plug your numbers into the Child Benefit Charge calculator to see your exact charge and the pension contribution that can remove it under the selected assumptions.