High Income Child Benefit Tax Charge – How to Pay the Tax Charge

What is the High income child benefit tax charge? Do you know? For those persons who know what it is, do you know how it works or what its real purpose is? Well, I bet you don’t. If you would love to know more about this, then here is your chance. Continue reading the content of this post to find out.

High Income Child Benefit Tax Charge

High Income Child Benefit Tax Charge

The High-income child benefit tax charge or HICBC for short was introduced back in January 2013. This is a type of tax charge that applies just to anyone with an income of over 50,000 pounds who gets child benefits or whose partner gets child benefits. It really does not matter if the child living with you is yours or not.

You will need to work out your adjusted net income to easily work out or know if your income is over the threshold. What is your adjusted net income? This is your total taxable income before any personal allowances and other fewer things such as Gift Aid.

If in case your income is more than 50,000 pounds and also is your partner, then the person with the higher income is solely responsible for paying the tax charge, just in case you are wondering who is going to pay the tax.

Partner in this case is someone who you are not permanently separated from whom you are married to or in a civil relationship and partnership with or you are just living with as if you were. If however, your income is just over the threshold, you can opt to either get child benefit payments and then pay any tax charge at the end of each tax year. Or not get child benefit payments and then not pay the tax charge.

If in the event you select not to get child benefits, you can still fill in the child benefit claim form. You will however need to state on the form that you don’t want to get payments. Furthermore, you will however need to fill in the claim form if you want to get access to national insurance credit that normally counts towards your state pension.

You will also need to fill out the claim form if you want to make sure that your child gets their hand on a national insurance number automatically before they get to the age of 16, else they will need to apply for one themselves.

If however, you are already getting child benefits, you can choose to stop getting child benefits which is sometimes known as opting out, or continue getting child benefits and then pay any tax charge at the end of each tax year.

What is Child Benefits and How Does it Work?

Child benefit is money paid by the government to anyone responsible for bringing up a child. Thus, only one parent can claim it on behalf of a child, notwithstanding, if you are not the parent of the child but responsible for providing and bringing up the child you can also claim it on behalf of the child. You can claim it for each child in your care.

Well, for the current 2023/24 tax year, you get £24 per week for the eldest or only child and £15.90 per week for any other children. Child benefit is paid every four weeks and its claimed by the child’s parent or guidance.

How Can Your Child Qualify for Child Benefits 

Below are requirements:

  • The child must be under the age of 16 or under the age of 20 if they are still in certain types of education or training.
  • Also, in other to lay claim the child benefits from our responsibility, generally means that they live with you and that you regularly pay for the cost of their care, such as clothing or food

What are the Rules for Child Benefits?

Here are rules that guide the effectiveness of child benefits:

  • Only one parent or guardian can claim
  • Payments can be backdated for three months so remember to start claiming before the baby is three months old
  • The child benefit money is paid every four weeks
  • There is no limit to the number of children you can claim for
  • You can claim as soon as you have registered your child’s birth
  • Foster carers can claim as long as the council is not paying towards the child’s accommodation or maintenance
  • Adoptive parents can claim as soon as their child comes to live with you
  • You may have to pay back some of your child’s benefit in tax if your or your partner’s individual income exceeds £50,000 a year.
  • Those living abroad generally can’t claim although there are some exception

How to Claim Child Benefit

Below are outline guides to follow:

  • First, fill in the child benefit claim form CH2 and send it to the child benefit office address on the form. Adoptive parents will need the original adoption certificate to be sent with the form.
  • For births registered in Northern Ireland or outside the UK, include the original birth certificate and, if relevant, the passport or travel document used to enter the UK.
  • If adding a child to an existing claim you can call the HMRC helpline
  • Have your national insurance number or child benefit number to hand as well as your child’s birth certificate.

What is the High-income Child Benefit Charge?

Well, this simply states that if you and your partner each earn less than £50,000 a year, you will get the full amount of child benefit. However, if either of you earns more than this, you will have to pay some or all of the benefit back to the government in the form of the high-income child benefit charge (HICBC).

How to Pay the Tax Charge

To pay the tax charge, you must register for self-assessment and also fill in a self-assessment tax return each tax year and then pay what you already owe. If usually, you do not send a tax return, you will need to register by the 5th of October following the tax year that you need to pay the tax charge.

If on the other hand, you were unable to get information from your ex-partner or your partner, you should write to HM Revenue and Customs to know whether they get child benefits if they have a higher adjusted net income than you. HMRC will not release any financial information to you but will rather reply to you with yes or no.

Stop Your Child Benefit

This is easy. You can fill in an online form to stop your child benefit or you can otherwise contact the child benefit office by post or by phone. To fill in the online form you will need a government gateway user ID and a password. If in the event that you do not have a user ID, you can easily create one when filling out the form.

If it is that you are using your child benefit to pay back an overpayment or certain benefits from other countries, you cannot stop your child benefit. After your child’s benefits stop, you must pay back the tax charge that is owed for each tax year up to the date that the benefits stop. And even after your child benefit payments stop, you must report any changes in your life that affect your entitlement to child benefits.

To learn more about restarting your child’s benefit and what to do if your circumstances change, check here.

What is the Age Limit for Child Benefits?

Child benefit payments stop on 31 August after your child turns 16 if they leave education or training. However, if your child is in approved full-time education or training, you can continue receiving child benefits until they are 19.

How Much is Child Tax Credit Per Child UK?

The child you’re responsible for will need to be either under 16 or between 16 and 20 and in full-time approved education or training. A 16-year-old who’s not in approved education or training is considered a young person until the 31 August after they turn 16 unless: they work 24 or more hours a week.

Do you get a Child Tax Credit UK?

Yes, but you can only make a claim for Child Tax Credit if you already get Working Tax Credit. If you cannot apply for Child Tax Credit, you can apply for Universal Credit instead. You might be able to apply for Pension Credit if you and your partner are State Pension age or over.



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