What should you do about the High Income Child Benefit Charge?
Child benefit is a great tax-free benefit for parents, but if you or your spouse earn over £50,000, you might need to pay some or all of it back – this is called the High Income Child Benefit Charge.
How much is the Child Benefit?
- £20.30 a week for your eldest child
- and £13.40 a week for each of your other children
Use this child benefit charge calculator to see how much you’re entitled to, and if you need to pay any of it back.
How your child benefit is calculated
The child benefit is simply a payment that the UK government can give to any parent who has children under the age of 16.
How much you get depends on:
- how many children you have
- and how much you earn: if you earn over £50,000 this benefit is reduced.
Child benefit breakdown
You have 1 child
You get £20.70 per week for your child.
In total that’s £1,076 per year.
Who needs to file the tax return and pay?
Whoever has the higher income: either you or your partner.
It doesn’t matter who actually received the Child Benefit in their bank account.
You’ll need to:
- register for Self Assessment (you can do it online here) by October 5th following the tax year when you received the Child Benefit
- submit the Self Assessment before the January 31st deadline
- and pay back the Child Benefit as income tax.
Should I still claim Child Benefit if I have to pay it back?
In short, yes.
The advantages of claiming Child Benefit:
- you get National Insurance credits – which count towards your state pension (very important if you’re on a low income)
- your child will also receive a National Insurance number right before they turn 16 – they won’t need to apply for one themselves
- your Child Benefit payments are “protected” in case your income ever drops under £50,000 (because of unemployment, etc.)
What you can do:
- carry on getting Child Benefit and pay any tax charge at the end of each tax year,
- or stop getting Child Benefit entirely – here is how you do it,
- or (the best option), still fill in the Child Benefit claim form but choose to not get the Child Benefit payments.
With the third option you get all the benefits but you don’t need to worry about filing a tax return or paying the High Income Child Benefit Charge.
You can also restart your child benefit if you’ve stopped it.