The High-Income Child Benefit Tax Charge (HICBC) is a tax charge that applies to anyone with an income of over £50,000 who gets child benefits, or whose partner gets it. The scheme was first introduced in January 2013.

Child benefits are a government payment, distributed to parents or guardians every 4 weeks to help support their children’s upbringing. You normally qualify for child benefits if you’re responsible for a child under 16 (or under 20 if they stay in approved education or training) and you live in the UK.

You’ll usually be responsible for a child if you live with them or you’re paying at least the same amount as Child Benefit (or the equivalent in kind) towards looking after them, for example on food, clothes or pocket money. If you’re eligible you will receive £21.15 a week for your first child and £14.00 a week for any other children in your care after that.

Who Does The High Income Child Benefit Tax Charge Affect?

Basically, the HICBC impacts any household where one of the parents or carers has an adjustable net income of over £50,000. A ‘couple’ for this purpose includes two people who are living together as if they are married or in a civil partnership, as well as those who are actually married or in a civil partnership (unless separated). This means that couples can effectively have a combined income of up to £100,000 and the charge will not apply, as long as neither of their individual incomes is over £50,000. This is because the charge applies to the higher-income partner in a couple, irrespective of the income of the other partner.

How To Comply With The High Income Child Benefit Tax Charge?

In order to comply with the HICBC, if you or your partner have an individual adjustable net income of over £50,000 and are receiving child benefits, you will need to declare this in your annual self-assessment returns. If your adjustable net income is below £50,000 then you will not be subject to any charge for child benefits.

We hope this outlined to you exactly what the High-Income Child Benefit Tax Charge is and whether or not it applies to you or your household. If you require any more information on any welfare benefits, or anything accounting related for that matter, please don’t hesitate to get in contact with us where one of us would be happy talking you through your query.