When adjusted net income exceeds £60,000 per year, many families with children believe there’s no point in claiming Child Benefit if they must pay some or all of it back through the High Income Child Benefit Charge. Whilst there may not be any net monetary gain, in some cases, claiming Child Benefit even when your income exceeds £60,000 can be beneficial.

This article explains how Child Benefit affects high earners, how the High Income Child Benefit Charge really works, why you may still want to claim, and how it affects your National Insurance record and State Pension entitlement.

What Is Child Benefit?

Child Benefit is a government payment made to families responsible for raising a child under the age of 16, or under 20 if they remain in approved education/training. It is paid at a flat weekly rate. For 2026/27, the rates are:

  • £27.05 per week for the eldest/only child
  • £17.90 per week for each additional child

There is no means test; any eligible family can claim, regardless of income.

However, once income passes a certain threshold, families may find they are required to pay back some or all of this payment via the High Income Child Benefit Charge. This leads many high earning families to wrongly believe there’s no point in claiming, but there are other reasons to claim Child Benefit, beyond the monetary value.

What Is the High Income Child Benefit Charge?

The High Income Child Benefit Charge (HICBC) is a tax charge that claws back Child Benefit payments from families where the highest earner has an adjusted net income above £60,000.

For every £200 above the £60,000 threshold, 1% of the total Child Benefit received is repaid. By the time adjusted net income exceeds £80,000, the full amount is clawed back.

The charge is based on the individual with the higher income, not on the combined household income. This creates an unusual quirk that affects some families unequally; a household where one partner earns £80,000 and the other earns nothing will have to repay the full benefit, whilst a household where both partners earn £59,000 each (for a combined income of £118,000) will receive the full benefit and repay nothing, despite earning more money overall.

The government have previously considered moving the charge to a household income basis but confirmed in 2024 that they would not currently be proceeding any further with this reform.

Why You Should Claim Child Benefit as a High Earner

When one partner earns above £60,000, we often see families stop claiming Child Benefit or decide to never claim it at all, believing that there’s no point if they’ll have to pay some or all of it back.

This might seem very logical. If you earn over £80,000, there’s no net financial benefit to claiming Child Benefit. But there’s another value to claiming Child Benefit that goes beyond just the money.

How Child Benefit Affects National Insurance Credits and State Pension

When a parent or carer who is not in paid employment claims Child Benefit, they receive National Insurance credits for each year the claim is active. If one partner has stepped back from work or reduced their hours to take on primary child-care duties, they may not be accruing the necessary credits to earn their full pension. These Child Benefit credits may be their only way to build their NI record to protect their State Pension entitlement.

Many people don’t realise that they can still claim Child Benefit without needing to accept the payments, meaning they can avoid the HICBC but still receive the National Insurance credits. The HICBC only applies to the payments received, so by opting out of payments while remaining registered, NI credits are preserved for a non-working partner.

From April 2027, HMRC are expected to allow families to claim NI credits retroactively for years where they were eligible, but Child Benefit was not claimed, backdated by up to 6 years. This means that if you cancelled your claim or didn’t claim at all, you may be able to claim past credits to fill gaps in a non-working partner’s NI record.

An additional positive is that a Child Benefit claim ensures any children claimed for are automatically issued with a National Insurance number. This usually arrives in the post a few months before they turn 16. If you haven’t claimed Child Benefit, your child may need to go through the NI application process to get their NI number.

How Claiming Child Benefit Affects Different Types of Higher Earner

Depending on how your income is structured, how you pay the High Income Child Benefit Charge may change.

PAYE Employees

For employed individuals on PAYE with an income above £60,000, you can pay the HICBC through your tax code to simplify your tax obligations if you wouldn’t normally need to file Self-Assessment. It’s important to note that this may not always be automatically handled by your employer, and it’s your responsibility to inform HMRC. Even if there is no net financial gain to claiming Child Benefit, remember that the NI credits can flow to your partner if they are not working due to childcaring responsibilities, helping to protect their State Pension entitlement.

Company Directors

If you’re a company director drawing a combination of salary and dividends, you need to be aware that dividends will count towards your adjusted net income for HICBC. Even if you take a low salary, you may find that significant dividends push your total adjusted net income into the HICBC band. Pension contributions, gift aid donations, and carefully timing your dividends across two tax years can help to reduce adjusted net income, which may reduce or eliminate the charge. Our article on the £100K Tax Trap details more ways you can reduce your adjusted net income.

Self-Employed Individuals

For self-employed individuals, income can fluctuate year to year. In some years, income may fall below the £60,000 threshold, eliminating charges, whilst you may need to pay the HICBC in others. Retaining the Child Benefit claim in lower-income years is simple and helps to ensure NI credits are not missed. In years where your income exceeds £80,000, we advise remaining registered and simply opting out of receiving Child Benefit payments. If you are self-employed and need to pay the HICBC because your income exceeds the threshold, you may also fall under the new MTD system. Our team can confirm if you should be using MTD and offer support when making the switch.

Property Landlords

Taxable property income is included in the adjusted net income calculation for HICBC. This means your rental income and any other taxable property income is added to any other sources of income you may have such as a salary. If your property income pushes your total adjusted net income above £60,000, you will be subject to HICBC.

An Important Note for Landlords and Self-Employed Individuals Earning £50K or Higher

If you have a gross income of more than £50,000 per year from self-employment or property, the way you file your taxes has changed for the 2026/27 tax year. Under the new Making Tax Digital system, you are now required to keep digital records and provide quarterly updates along with your final tax return as normal.

For 2026/27, MTD applies to gross qualifying income above £50,000. This means if you earn income from a mix of sources such as self-employment and property, you are evaluated on the combined gross qualifying income from both sources. From the 2027/28 tax year, this threshold lowers to £30,000, then decreases again to £20,000 for the 2028/29 year.

It’s important to remember that these thresholds are not based on profit, but on the gross qualifying income, meaning you may still need to register for MTD even if your profits are lower.

If you haven’t already taken steps to ensure you’re compliant under the MTD system, we can still help.

The first quarterly deadline of 7th August 2026 has now passed, but we can still offer support if you are not yet compliant under the new rules. Get in touch urgently if you think MTD may apply to you.

Common Misconceptions

Whilst claiming Child Benefit can be highly beneficial for more than just the monetary value, we encounter a lot of misinformation that leads people to believe there’s no reason to claim.

Some of the most common myths we hear about Child Benefit include:

  • “There is no point claiming if my income is above £60,000.” The High Income Child Benefit Charge only claws back 1% of the payment for every £200 earned over the threshold, meaning that some families may still have financial gain from claiming, even if they must repay partially. Whilst the charge is fully clawed back by the time the highest earner’s adjusted net income reaches £80,000, you can apply the NI credits to a non-working partner to protect their NI record and State Pension.This is often a good reason to remain registered for Child Benefit, even when there’s no immediate monetary gain.
  • “We stopped claiming years ago, so it does not affect us.” Families who cancelled their Child Benefit claim rather than opting to receive zero payment while remaining registered may have missed NI credits. From April 2027, the government has plans to allow families to claim back missing NI credits from Child Benefit. It is worth checking the affected partner’s NI record for gaps to determine if it’s worth making a claim when this change takes effect in April next year.
  • “My employer sorts out the HICBC through payroll.” Whilst you can arrange for the charge to be collected at source through your tax code if you are on PAYE, employers do not manage the HICBC. It is your responsibility to notify HMRC and ensure the charge is collected correctly. If you have additional sources of income (such as property) as well as your PAYE employment, you will need to register for Self-Assessment. You may also need to file under the new MTD system.
  • “My salary is below £60,000, so HICBC doesn’t affect me.” HICBC is calculated based on your adjusted net income. Even if your salary is low, you will still need to pay the HICBC if you have other sources of taxable income such as side-work or property income that pushes you over the threshold.
  • “The charge is unfair, so we should just ignore it.” The HICBC may seem unfair because it is based on the highest earner’s adjusted net income, not total household income. However, if the charge applies, it must be declared and paid. Ignoring it can lead to HMRC interest and penalties.

Next Steps for High Earners Considering Child Benefit

If you’re not sure of your position, it’s worth taking the following next steps to determine if your family should be claiming Child Benefit.

  • Check whether a Child Benefit claim is already in place. If you’re unsure if you cancelled entirely rather than reduced to zero payment, you can check on your gov.uk account to manage your existing benefit claims.
  • Check the non-working partner’s NI record. The government’s Check Your State Pension forecast tool shows your current qualifying years and projected entitlement. If your partner has gaps in their NI record where you could’ve been claiming Child Benefit, you may be able to claim back those credits when the replacement credit service becomes available.
  • Check whether MTD applies to you. If you are subject to the HICBC and are self-employed or receive taxable property income, you may also need to meet Making Tax Digital requirements.
  • Consider ways to reduce adjusted net income. Pension contributions and Gift Aid donations both reduce adjusted net income, which can reduce the HICBC or eliminate it entirely.
  • Review your position annually. Income fluctuates year-on-year, especially if you’re self-employed. If income falls below the threshold, you may choose to accept payments.
  • Ensure compliance. If you think the HICBC applies and has not been declared, talk to a professional accountant. Ignoring the charge can lead to consequences including daily interest and financial penalties.

For support navigating Child Benefit as a high earner, reach out to our team. We can help you assess your position and recommend the best course of action. Our solutions are tailored to you, taking full account of your household finances rather than offering generic advice that may not suit your needs.

All information is based on current legislation for the 2026/27 tax year and is correct at the time of publication – check the most up to date guidance from HMRC before making any financial decisions. This article is for information purposes only and is not intended to replace consultation with a qualified accountant.

Frequently Asked Questions about Child Benefits

If my income is above £80,000, is there any financial benefit to claiming Child Benefit?

In cash terms, there is no net financial gain from claiming as the HICBC will equal the full amount of Child Benefit received. However, remaining registered for Child Benefit while opting out of payments allows for National Insurance credits to go to a non-working partner, which contributes to their State Pension entitlement in the long-term.

Yes. You can register for Child Benefit and opt out of receiving the actual payments. This means you can retain the NI credits for a non-working partner without needing to pay the HICBC or file for Self-Assessment if you wouldn’t normally need to. This is the recommended position for most families where the higher earner’s income exceeds £80,000.

If the claim was cancelled entirely — rather than set to zero payment — there may be gaps in the non-working partner’s NI record. From April 2027, the government plans to make it possible to claim some NI credits retroactively for years where Child Benefit was not claimed. It is worth checking the NI record and taking advice on whether a backdated credit claim is appropriate.

The charge is based on the individual income of the highest earner, not the combined household income. If your income is above the threshold and your partner’s is not, you will still need to pay the charge regardless of how the Child Benefit is paid or whose account it goes into.

Yes. For directors taking a combination of salary and dividends, both count towards adjusted net income. If you’re a company director on a low salary but taking substantial dividends, you may find that the total takes you above the HICBC threshold, though it may not be obvious from your payslip alone. Pension contributions, Gift Aid donations and other methods of reducing adjusted net income may help to lower or remove the HICBC.

The HICBC is assessed on a tax year basis, so the charge only applies in years where your adjusted net income exceeds £60,000. In years where your income falls below the threshold, you can retain the full Child Benefit payments with no charge. In years where income exceeds the threshold, you can opt out of the payments whilst remaining registered. Keeping the claim active ensures credits and payments are received in lower-income years without any need to re-register.

No. The HICBC is not handled by employers. Since October 2025, employed individuals on PAYE and who would not otherwise need to file Self-Assessment can opt to pay the HICBC through their PAYE tax code, but it is your responsibility to notify HMRC directly. Do not assume your employer will handle everything – this can result in missed HICBC payments which could lead to interest or fines.

If the charge applies but has not been declared, HMRC has powers to assess and collect it. They may also add interest and financial penalties. Seek advice from a professional accountant before making a disclosure to HMRC, as the best route of action will depend on the value of the charges and for how long the charges have been missed.

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