top of page

Insights: High Income Benefit Charge

Writer's picture: Ian CrampIan Cramp

The High Income Child Benefit Charge (HICBC) applies to individuals in the UK with an income over £50,000 who receive Child Benefit or whose partner receives it.


Here are the key points:


  • Threshold: If you or your partner have an individual income exceeding £60,000, you may be subject to the HICBC.

  • Adjusted Net Income: To determine eligibility, calculate your ‘adjusted net income,’ which includes total taxable income (excluding allowances and Gift Aid) and interest from savings and dividends.

  • Tax Charge Responsibility: If both you and your partner exceed the threshold, the higher earner is responsible for paying the tax charge.

  • Options:

    • Receive Child Benefit Payments: You can receive Child Benefit payments and pay the tax charge at the end of each tax year.

    • Opt Out: Alternatively, you can opt out of receiving payments altogether and avoid the tax charge.

  • Tapered Charge: If your income falls between £60,000 and £80,000, the charge is 1% of Child Benefit for every £200 of income exceeding £60,000. Beyond £80,000, the charge equals the Child Benefit payment.


Example: Suppose you earn £65,000 annually and receive Child Benefit for two children. Your adjusted net income exceeds the threshold (£60,000). The charge would be calculated as follows:


  • Excess income: £65,000 - £60,000 = £5,000

  • Charge: 1% of £5,000 = £50

  • You’d pay £50 for the Child Benefit received during the tax year.


If you are in any doubt, get in touch with us today.



13 views0 comments

Comments


USEFUL INFORMATION

CONTACT

ACCREDITATIONS

3 The Tulworths, Longlevens, Gloucester, GL2 9RS.

VAT Registration Number: 469 6845 24

CIMA Logo

Insurance held with Simply Business: CHBS3199384XB

01452 471 041

© 2024 by Original Accountancy Limited. Website created by Time to Hustle.

FreeAgent logo
Xero bronze partner logo
QuickBooks logo
calendly logo

Find us in the CIMA Members Directory.

Ian Cramp is a Registered Individual of WIS Contractor Mortgages Ltd which is Authorised and Regulated by the Financial Conduct Authority (FCA). Firm reference number 824411. This can be verified by visiting The Financial Services Register. Registered Office: 4 Imperial Place, Borehamwood, WD6 1JN. Registered in England and Wales. Registration number 11496588.

bottom of page