” You may have to pay the High Income Child Benefit Charge if you or your partner have an individual income that’s over £50,000. If the income exceeds £60,000 Child benefit is removed completely. You’ll need to work out your ‘adjusted net income’. This charge is to prevent taxpayers who are classed as wealthy receiving state aid.”
Nigel Holland
Overview
You may have to pay the High Income Child Benefit Charge if you or your partner have an individual income that’s over £50,000 and either:
- you or your partner get Child Benefit
- 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.
What counts as income
To work out if your income is over the threshold, you’ll need to work out your ‘adjusted net income’.
Your adjusted net income is your total taxable income before any allowances and not including things like Gift Aid. Your total taxable income includes interest from savings and dividends.
Use the Child Benefit tax calculator to get an estimate of your adjusted net income.
Who pays the tax charge
If your adjusted net income is over £50,000 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.
Your income is over the threshold?
You can choose to either:
- get Child Benefit payments and pay any tax charge at the end of each tax year
- 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:
- get National Insurance credits, which count towards your State Pension
- get 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 either:
- opt out of getting Child Benefit payments
- carry on getting Child Benefit payments and pay any tax charge at the end of each tax year