How the Charge Works
Child Benefit in 2026/27 is worth £27.05 per week for your first child and £17.90 per week for each additional child. That works out to £1,406.60 a year for one child, or £2,337.40 for two children.
If the higher earner in your household has an Adjusted Net Income (ANI) above £60,000, HMRC claws some of that benefit back through the High Income Child Benefit Charge. The charge works like this: for every £200 of income over £60,000, you repay 1% of the total Child Benefit received that year.
At £70,000, you've exceeded the threshold by £10,000. That's 50 lots of £200, so you repay 50% of your Child Benefit. At £80,000, you've exceeded by £20,000 (100 lots of £200), and you repay 100%. Above £80,000, you lose the full amount.
Worked Examples (2 Children)
Full Child Benefit for 2 children: £27.05 + £17.90 = £44.95/week = £2,337.40/year.
ANI = £60,000
Excess over £60,000: £0. Charge: 0%.
You keep all £2,337.40. No charge, no Self Assessment needed for HICBC.
ANI = £65,000
Excess over £60,000: £5,000. That's 25 x £200 = 25% charge.
Charge: 25% of £2,337.40 = £584.35.
Net benefit kept: £1,753.05.
ANI = £70,000
Excess over £60,000: £10,000. That's 50 x £200 = 50% charge.
Charge: 50% of £2,337.40 = £1,168.70.
Net benefit kept: £1,168.70.
ANI = £80,000 or above
Excess over £60,000: £20,000+. That's 100+ x £200 = 100% charge.
Charge equals the full benefit. Net benefit: £0.
Income vs Charge: Full Breakdown
| Adjusted Net Income | Charge % | Net Kept (1 child) | Net Kept (2 children) |
|---|---|---|---|
| £60,000 or below | 0% | £1,406.60 | £2,337.40 |
| £62,000 | 10% | £1,265.94 | £2,103.66 |
| £65,000 | 25% | £1,054.95 | £1,753.05 |
| £68,000 | 40% | £843.96 | £1,402.44 |
| £70,000 | 50% | £703.30 | £1,168.70 |
| £75,000 | 75% | £351.65 | £584.35 |
| £80,000+ | 100% | £0 | £0 |
Child Benefit rates: £27.05/week (first child), £17.90/week (additional children) for 2026/27. Annual figures based on 52 weeks.
Pension Contributions: The Best Defence
The charge is calculated on Adjusted Net Income. Pension contributions reduce your ANI directly. This makes pensions the most effective tool for keeping your Child Benefit.
Worked Example: Pension Strategy
David earns £70,000 gross. He has 2 children. Without any pension contributions, his ANI is £70,000 and the HICBC costs him £1,125.80 per year (50% of £2,251.60).
David contributes £10,000 (gross) into his personal pension. His ANI drops to £60,000. The charge drops to zero.
That £10,000 pension contribution costs David £6,000 out of pocket (he pays £8,000 net, the pension provider claims £2,000 basic rate relief from HMRC, and David claims another £2,000 higher rate relief through Self Assessment).
Total benefit: £2,000 higher rate tax relief + £1,125.80 Child Benefit saved = £3,125.80. He pays £6,000 to get £10,000 in his pension plus £1,125.80 in Child Benefit. Every £1 of pension contribution is worth far more than £1 in this income range.
Salary Sacrifice Is Even Better
If David's employer offers salary sacrifice, the £10,000 goes into his pension before tax and National Insurance. He saves an additional 2% employee NI (£200). His employer also saves 13.8% employer NI (£1,380) and may share some of that saving with David.
With salary sacrifice, David's gross salary itself drops to £60,000, so his ANI is automatically reduced. No Self Assessment claim is needed for the pension relief.
Which Partner Should Claim?
Either parent can claim Child Benefit. The charge falls on the partner with the higher income. This means it doesn't matter who fills in the claim form. HMRC will look at both partners' incomes and apply the charge to whoever earns more.
The partner who owes the charge must file a Self Assessment tax return to declare and pay it, even if the other partner is the one who claims the benefit. If neither partner earns over £60,000, no charge applies and no extra tax return is needed.
Opting Out vs Staying In
If the charge wipes out your entire benefit (income over £80,000), you might think there's no point claiming. That would be a mistake if one parent is not working.
⚠️ NI credits matter. A non-working parent who claims Child Benefit automatically receives Class 3 National Insurance credits. These credits count toward their State Pension entitlement. You need 35 qualifying years for a full State Pension (worth £11,502/year in 2026/27). Missing years can cost you hundreds of pounds a year in retirement.
You have three options:
- 1Claim and receive payments. Pay the charge through Self Assessment. You get NI credits and can still come out ahead if your income is between £60,000 and £80,000.
- 2Claim but opt out of payments. Fill in the claim form but tick the box to not receive payments. No money comes in, no charge applies, and the non-working parent still gets NI credits. This is the best option if income is well above £80,000.
- 3Don't claim at all. No benefit, no charge, no NI credits. Only do this if both partners are already building full NI records through employment.
The Hidden Tax Rate Between £60k and £80k
On paper, income between £50,271 and £125,140 is taxed at 40%. But the HICBC adds a hidden cost on top of that. For a family with 2 children, the charge adds an extra effective tax rate of about 11.3% on income between £60,000 and £80,000. Combined with 40% Income Tax and 2% NI, the marginal rate in this band is around 53.3%.
For a family with 3 children, the effective rate is even higher. This makes pension contributions in this income range exceptionally valuable: you avoid 40% tax, 2% NI, and the HICBC clawback all at once.
Edge Cases
- Bonus pushes you over £60k: A one-off bonus counts as income in the tax year it is paid. If your salary is £58,000 but you get a £5,000 bonus, your ANI is £63,000 and the charge applies for that year. Consider asking your employer to pay the bonus into your pension via salary sacrifice.
- Self-employment income: All taxable income counts, including self-employment profits, rental income, savings interest, and dividends. The charge uses the same ANI calculation as the rest of the tax system.
- New baby mid-year: Child Benefit is paid from the week after you claim. The HICBC is proportional. If you only receive 26 weeks of benefit, the charge is based on that lower annual amount.
- Partner moves in: HMRC looks at your household on a week-by-week basis. If your new partner moves in and earns over £60,000, the charge can start applying from that week.
- Gift Aid donations: Like pension contributions, Gift Aid donations reduce your ANI. A £1,000 gross Gift Aid donation reduces your ANI by £1,000. This is less common as a planning tool but works the same way.
Calculate Your Position
See exactly how much you might need to repay, or how much a pension contribution could save you.
Use the HICBC Calculator →Common Questions
Is the High Income Child Benefit Charge based on household or individual income?
Individual income. HMRC looks at the Adjusted Net Income of the highest earner in the household. If one parent earns £75,000 and the other earns £0, the charge applies because one individual exceeds £60,000. If both parents earn £55,000 each (£110,000 total household income), no charge applies because neither individual exceeds £60,000.
What if both parents earn over £60,000?
The charge is based on whoever has the higher income. Only one charge applies per household. It does not double up. The parent with the higher Adjusted Net Income is the one who must pay the charge (or file a Self Assessment return to declare it). The other parent's income is irrelevant for HICBC purposes.
Do I still get National Insurance credits if I opt out of Child Benefit?
Only if you still fill in the claim form. You can claim Child Benefit but tick the box to not receive payments. This preserves NI credits for the non-working parent without triggering the charge. If you do not claim at all, the non-working parent misses out on NI credits toward their State Pension, which could cost thousands in retirement.
Can pension contributions reduce the Child Benefit Charge?
Yes. Pension contributions (personal or employer via salary sacrifice) reduce your Adjusted Net Income. If your gross salary is £70,000 and you put £10,000 into your pension, your ANI drops to £60,000. The charge disappears completely. You also get tax relief on the pension contribution, making this one of the most effective strategies for higher earners.
What counts as Adjusted Net Income for HICBC?
Start with your total taxable income from all sources (salary, self-employment, rental income, savings interest, dividends). Subtract personal pension contributions (gross amount) and Gift Aid donations (gross amount). The result is your Adjusted Net Income. Employment pension contributions made via salary sacrifice are already excluded from your taxable income, so they reduce ANI automatically.