Officials today issued a warning to parents explaining how much they may need to pay back if they pass a key threshold
Parents are being told if they earn too much over certain thresholds they have to pay back child benefit (Image: Photodjo via Getty Images)
HM Revenue and Customs has issued a caution to anyone earning in excess of £60,000. In a recent post on X, the tax authority alerted that some individuals may be required to repay money.
HMRC stated: “Do you earn over £60,000? You may need to pay the High Income Child Benefit Charge.”
Officials further explained: “You or your partner may have to pay the High Income Child Benefit Charge if either of you receives Child Benefit and at least one of you earns more than the threshold. This means you will have to pay some or all of your Child Benefit back.
“The charge may also apply if someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep.”
During the 2022/23 tax year, approximately 440,000 people repaid a total of £525 million in High Income Child Benefit Charge (HICBC). According to official statistics, these individuals, where one member of a household earned over £50,000, were obliged to return some or all of their child benefit.
The threshold
An individual income is over the threshold if it’s:
- over £60,000 for tax years starting from 2024 to 2025
- over £50,000 for tax years up to and including the tax year 2023 to 2024
What counts as income
HMRC says to work out if your income is over the threshold, people will need to work out your ‘adjusted net income’. Adjusted net income is the total taxable income, which includes savings interest and dividends. It’s calculated before any Personal Allowances and less certain tax reliefs, such as pension contributions and Gift Aid.
Working out the tax charge
Parents can use the Child Benefit tax calculator to get an estimate of how much of the Child Benefit they will have to pay back.
From tax year 2024 to 2025 onwards
If either person earns more than £60,000 a year, they’ll have to pay some of their Child Benefit back. If either earns £80,000 or more, they’ll have to pay all of it back.
People will pay back 1% of the Child Benefit for every £200 you earn over the threshold. Example: Adjusted net income is £67,600 in tax year 2024 to 2025. This is £7,600 over the £60,000 threshold. As 7,600 divided by 200 is 38, you’ll pay back 38% of your Child Benefit.
For more information from HMRC click here.
