Parents earning over £60,000 will soon have a simpler way to pay their High Income Child Benefit Charge (HICBC).
From summer 2025, HMRC is introducing a new option allowing the charge to be paid through PAYE deductions directly from payslips.
This change means employed parents will no longer need to register for Self Assessment to pay the charge.
The new system will be implemented through a digital service launching next summer.
A sign for HMRC
PAThe move aims to streamline the process for families affected by the charge.
The High Income Child Benefit Charge applies to individuals earning more than £60,000 in the 2024/25 tax year.
This threshold will remain unchanged for the 2025/26 tax year beginning on April 6.
The charge is calculated as one per cent of a family’s Child Benefit for every £200 of adjusted net income over the £60,000 threshold
For those with incomes reaching £80,000, Child Benefit is fully withdrawn.
Currently, parents must pay this charge through Self Assessment, requiring them to complete a tax return each year they claim Child Benefit.
LATEST DEVELOPMENTS:
Parents can now claim Child Benefit online, HMRC has announced GETTYThe new digital service will allow employed parents to report their family's Child Benefit payments online.
They can then opt to have the HICBC automatically deducted from their wages through PAYE.
This removes the administrative burden of registering for Self Assessment solely to pay the charge.
For many working parents, this will simplify their tax affairs considerably.
The automatic payslip deductions will ensure the charge is spread throughout the year rather than paid as a lump sum.
HMRC expects this change to make the system more user-friendly for busy families.
Inheritance tax receipts hit a record £7.5bn for the 2023-24 tax yearGETTYThe Treasury confirmed the upcoming change in a post on X (formerly Twitter), stating: "We are making it simpler for families to pay their High Income Child Benefit Charge (HICBC)."
The post continued: "From Summer 2025, employed parents will have the option to pay their HICBC through PAYE, removing the need to register for Self Assessment."
This change was further detailed in a government document published after Chancellor Rachel Reeves' Spring Statement last week.
The document outlined the implementation timeline and confirmed the new digital service launch.
Parents earning £60,000 or less per year can claim the full amount of Child Benefit.
This applies if the child lives with them or if they contribute the same weekly amount as the benefit towards the child's care.
Only one parent or carer can claim Child Benefit, so couples must decide between themselves who receives it.
The tax charge doesn't apply if your or your partner's individual 'adjusted net income' for the whole tax year falls below the £60,000 threshold.
