Thousands of households receiving Child Benefit will now have the option to settle the high income tax charge via their tax code for the first time.
Child Benefit provides £26.05 weekly for the first child and £17.25 for each additional child. If you are caring for a child, you are eligible for Child Benefit. However, if you or your partner have a high income, you might need to repay a portion of this benefit.
Individuals earning above £60,000 are required to repay 1% of their Child Benefit for every £200 over the threshold. This is referred to as the High Income Child Benefit Charge. Once earnings surpass £80,000, the entire Child Benefit must be repaid. Typically, the high income charge is settled through self-assessment, but now there is the alternative to pay it through your PAYE tax code.
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HMRC will adjust your tax code to deduct the charge from your earnings. This service is available to employed individuals who do not need to file a self-assessment return for other reasons.
You have until January 31, 2026, to opt in for the latest tax year 2024/25, which concluded on April 5, 2025. If you are required to file a self-assessment anyway, you cannot utilize the new PAYE option. High-income households can claim Child Benefit without receiving payments, retaining National Insurance credits for their state pension without incurring the charge.
Child Benefit is claimed by over seven million families for children under 16 or under 20 in approved education or training. While various educational paths are included, university or BTEC qualifications are not covered. The child must reside with you, or you must contribute an equivalent amount to qualify for payments.
Fostering, adoption, or caring for a child for a friend or relative may also entitle you to claim Child Benefit. There is no restriction on the number of children you can claim for, but only one caregiver can claim.
Dan Tomlinson, Exchequer Secretary, mentioned the simplification of tax procedures by modernizing HMRC. Parents will benefit from a streamlined system for paying the High Income Child Benefit Charge without the need for additional tax filings.
He emphasized that upon enrollment, individuals will receive a new tax code reflecting the HICBC deduction, with any income fluctuations and Child Benefit adjustments accounted for throughout the year in their tax code.