Questions and Answers

Will I need to pay tax on child benefit income?

My husband and I both work and I am receiving child benefit for our son. Someone has told me about the ‘High Income Child Benefit Charge’. I’m worried I’m going to have to pay tax on the income, please could you help?

By Catherine Heinen, FCCA

If you or your partner are in receipt of child benefit and one of you has an individual income that’s over £60,000 you will have to pay the High Income Child Benefit Charge.

This includes where someone else gets Child Benefit for a child living with you and they contribute at least an equal amount towards the child’s upkeep. It does not matter if the child living with you is not your own child.

To work out if your income is over the threshold, you will need to work out your ‘adjusted net income’. Adjusted net income is your total taxable income before any allowances and not including payments for things like Gift Aid. Your total taxable income includes interest from savings and dividends. Use the Child Benefit tax calculator on HMRC's website to get an estimate of your adjusted net income.

If your adjusted net income is over £60,000 and so is your partner’s, then whoever has the higher income is responsible for paying the tax charge. ‘Partner’ means someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.

If your income is over £60,000, you can choose to:

receive Child Benefit payments and pay any tax charge at the end of each tax year. To pay the charge you must register for self-assessment and report it on your tax return
opt out of getting payments and not pay the tax charge

If you choose to opt out of getting Child Benefit payments you should still fill in the Child Benefit claim form. You need to state on the form that you do not want to get payments. You need to fill in the claim form if you want to:

receive National Insurance credits, which count towards your State Pension
receive your child a National Insurance number without them having to apply for one - they’ll usually get the number before they turn 16 years old

If you’re already getting Child Benefit payments you can choose to:

opt out of receiving Child Benefit payments
carry on receiving Child Benefit payments and pay any tax charge at the end of each tax year

Frequently Asked Questions

Yes, you can opt-out of receiving child benefit, which will stop the payments and avoid a high income child benefit charge. It is important to note that opting out of payments, but still registering for child benefit should protect National Insurance credits.

Failure to pay the high income child benefit charge can result in penalties and interest on the unpaid amount. HMRC may also take enforcement action to recover the debt.

Yes, if your income exceeds £60,000 and you or your partner received child benefit, you must declare it on your self-assessment tax return or let HMRC know in another way.

Date published 8 Nov 2023 | Last updated 8 Oct 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

Catherine Heinen, FCCA

Catherine is a Technical Content Writer at TaxAssist Accountants, and a qualified accountant. With experience working at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.

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