The High Income Child Benefit Charge can now be paid via PAYE. No more self assessment just for HICBC, if eligible. Here's how the rules, thresholds and practical steps work ...
High income child benefit charge, Families feeling the crunch, Sacrifice for all
Many families are now inquiring about how the new PAYE route affects the High Income Child Benefit Charge, and the short answer is that it simplifies the process for many, eliminating the need for a tax return solely for this purpose.
The basics remain unchanged!
Child Benefit is paid to households with eligible children, and if either partner's adjusted net income crosses the income threshold, some or all of it is clawed back. For 2024/25 onwards, the taper starts at £60,000 and removes 1% of the award for each £200 over that level, tapering to nil by £80,000. The mechanics are simple in principle but easy to misjudge in practice, so it pays to track income and benefits across the year.
What's new is HMRC's live online service that collects HICBC through PAYE. Previously, anyone who owed the charge had to enter self-assessment, even if all their income was taxed under PAYE, and any collection via coding out under £2,000 still hinged on filing a self-assessment.
Now, PAYE taxpayers who only use self-assessment for HICBC can opt out and let HMRC adjust their code to collect the charge directly, aligning payment with salary deductions.
To switch, the taxpayer must first deregister from self-assessment, because HMRC won't do this automatically. From the following day, the HICBC PAYE service should be available to use. HMRC plans to write to around 100,000 people who look liable but aren't in self-assessment, nudging them towards the service, which should remove a lot of friction.
There is one timing wrinkle to consider!
If someone needs to pay HICBC for both 2024/25 and 2025/26, two sets of charges may be included in a single year's PAYE code, depending on when they file for 2024/25 and when they activate PAYE collection. That could be in the 2025/26 or 2026/27 code. Planning ahead helps avoid surprises in take-home pay.
Not everyone can leave self-assessment, of course. Individuals who file a tax return for other reasons must continue to do so, and they can still have HICBC coded where appropriate. The key point is to review why a return is filed and streamline only where it's clean and compliant to do so.
Some households may prefer to stop receiving payments if the income threshold means the award will be fully clawed back. For example, where income exceeds £80,000 under the new regime. Opting out of child benefit can be done online, by form, by phone, or by post.
Agents cannot act on a client's behalf!
Even so, it usually makes sense to register for child benefit to secure Class 3 National Insurance credits for a non‑working partner and to trigger the child's NI number at age 16, while choosing to opt out of actual payments if that aligns with the family's situation.
In short, this PAYE route brings the High Income Child Benefit Charge closer to real-time, reduces paperwork, and helps many avoid an unnecessary tax return, provided they keep an eye on their changing income and benefits throughout the year.
If anything I've written in my blog post resonates with you and you'd like to discover more of my thoughts on the High Income Child Benefit Charge, then please call me on 01908 774320 and let's see how I can help you.
Don't forget to stay updated with our daily social media posts on Facebook.
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
From what I've read, penalties for MTD for Income Tax are starting to look much less mysterious. The main message is simple: you get a penalty if you miss a filing deadline, collect points, and pay late if the tax is overdue....
When most people hear about rising oil prices on the news, it's easy to switch off and go and do something more interesting instead. It can feel distant, global, and not particularly relevant to day-to-day business life. But ...
The Companies House data glitch has left many wondering whether their records have been changed. The safest move is to review filings, confirm details, and report anything unusual quickly. A calm check now can prevent bigger ...
This week's blog post is a guide on how to identify fake invoices. They always show the small clues that catch big scams. I'll cover verification habits, process controls, and what to do if money has already moved. Think prac...
I find it really interesting that many businesses are avoiding VAT registration by keeping their turnover just below the VAT threshold. So why is it happening, and what does it do to growth? I also want to touch on smarter sm...
Here's the practical change: Section 455 rises from the 6th of April 2026. If there's an overdrawn Director's Loan Account, the timing of the loan suddenly matters more. This is a quick, conversational run-through of what shi...
When I look at the latest economic commentary and data, my honest feeling is that the economy is in a strange place right now. It is not collapsing, but it is hardly thriving either. Growth has been slow, confidence feels fra...
Want the Spring Statement 2026 without the noise? This blog post explains what changed, what didn't, and why the forecasts matter. You can also download our summary and keep a simple reference of what the chancellor announced...
A property business works best when the basics are tidy. When records, tasks and communications are organised, decisions get easier, and growth feels ...
You've got a website. It looks good. It loads quickly. It ticks all the SEO boxes. And yet ... it's not bringing in the leads you expected. Sound fami ...
Splitting a business to avoid VAT may look clever, but it often isn't. HMRC can join entities together where links exist and challenge the arrangement ...
The right IT system in the hospitality sector is becoming increasingly important as businesses rely more heavily on technology to deliver smooth, effi ...
All content on this blog, including but not limited to text, images, videos and audio, is protected by copyright. No part of this blog may be reproduced, copied, distributed, or otherwise used without the prior written consent of the author. Unauthorised use constitutes a breach of intellectual property rights.
Please note that many elements of this blog have been created using Artificial Intelligence (AI). As such, content may not always reflect verified facts or professional advice. The information provided is for general interest only and should not be relied upon as a sole source for making decisions, financial or otherwise. Readers are strongly advised to seek independent advice from qualified professionals appropriate to their country and situation.
The author of this blog, YourPCM Limited, and its directors, employees, and authorised agents accept no liability for any loss, harm, or consequence arising from the use or interpretation of content found on this site.
The sblogit.com platform is provided on an “as is” basis. By continuing to view or interact with this blog, you acknowledge and accept these terms. If you do not agree with any part of this notice, please cease using this site immediately.
YourPCM Limited is a company registered in the UK and operates exclusively under the jurisdiction of the laws of England and Wales.
