Changes to the High Income Child Benefit Charge (HICBC).

As of 6th April 2024, two major changes have been made that affect any taxpayer who was previously affected by the High Income Child Benefit Charge (HICBC).

Firstly, the threshold where the charge starts to apply has been increased from £50k to £60k. This means that if the highest earning parent is earning below £60k, they will no longer need to repay the child benefit that has been received.

Secondly, the tapering effect which decides how much of the child benefit is repayable has also been changed. Instead of the effect tapering on earnings between £50k and £60k as it did up to tax year 2022/23, the effect has been stretched to effect taxpayers more slowly, now tapering based on incomes between £60k and £80k. This effectively means that if the highest earning parent earns less than £80k, some of the child benefit monies will be kept, rather than being repaid.

Due to the changes mentioned above, for those taxpayers who had opted out of receiving child benefit may wish to consider opting back in, if they feel that they will benefit from receiving it. Please note however that child benefit can only be backdated for a maximum of three months, so we advise those taxpayers to opt back in as soon as possible.

If you wish to discuss this, please contact Matthews Hanton and ask about the High Income Child Benefit Charge.