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Child Benefit and the High Income Charge

Figures Last checked Where these come from

On an adjusted net income of £70,000 with 2 children, 50% of Child Benefit is clawed back — £1,169 of £2,337, leaving £1,169. Inside the charge, each extra £1 of income costs another 11.69% of benefit on top of tax and National Insurance.

a year
Child Benefit you keep £1,169 of £2,337 a year
Clawed back £1,169 50% of the benefit

Inside the charge, every extra £1 of income costs you 11.69% of Child Benefit — on top of income tax, National Insurance and any student loan. With 2 children that turns a higher-rate marginal rate of 42% into roughly 53.7%.

Child Benefit for 2 children£2,337.40
£27.05 a week for the eldest, £17.90 for each other
Adjusted net income£70,000.00
£10,000 over the threshold, at 1% per £200
High Income Child Benefit Charge−£1,168.70
Child Benefit you keep£1,168.70

Why this trap is different for every family

Every other threshold in the UK system is the same for everyone. This one is not. The charge claws back a percentage of your Child Benefit across a fixed £20,000 band, so the more children you have, the more is being withdrawn over the same stretch of income — and the higher your effective marginal rate.

For one child it adds roughly six percentage points; for three it is closer to eleven. Stacked on a higher-rate marginal rate of 42%, a larger family inside the band can be losing more than half of every additional pound before a student loan is counted.

What catches people out

  • The charge is based on one person’s income, not the household’s. Two parents earning £55,000 each keep all of it; one earning £85,000 with a partner earning nothing loses all of it. That is how the rule is written, and it is the part people find hardest to believe.
  • It is adjusted net income that matters, not salary. Pension contributions, Gift Aid and trading losses come off before the test, which is why a pension sacrifice can recover Child Benefit as well as saving tax — often the single highest-value use of a sacrifice in the whole system.
  • The effective marginal rate depends on how many children you have. The same £20,000 band claws back a bigger benefit for a larger family, so the rate rises with each child — unlike every other UK threshold, which is the same for everyone.
  • You can keep claiming and pay the charge, or opt out of payments. Opting out entirely is usually a mistake if either parent is not working: claiming Child Benefit is what credits National Insurance towards the state pension for whoever is at home with a child under twelve, and that credit is lost if no claim exists.
  • The threshold has not moved with inflation. It was £50,000 with a £100 step until 2023/24 and is £60,000 with a £200 step now, so more families cross it each year without their real income changing.

Questions

What counts as adjusted net income?

Total taxable income — including savings interest and dividends — before personal allowances and after certain reliefs, chiefly pension contributions and Gift Aid. It is not the same as your salary, and it is not the figure on your payslip.

Because pension contributions come off, a sacrifice that brings you below the threshold recovers the benefit as well as the tax. That combination is why this is one of the few places where the arithmetic is genuinely dramatic.

Who pays the charge if both of us earn over the threshold?

Whoever has the higher adjusted net income, regardless of who receives the payments. HMRC treats “partner” as someone you are married to, in a civil partnership with, or living with as if you were — not merely a co-parent.

Should I stop claiming?

That is a decision rather than a sum, and it turns on something the arithmetic cannot see. You can claim and pay the charge, or claim but ask for no payments — and the second option still credits National Insurance towards the state pension for a parent at home with a child under twelve.

Stopping the claim altogether forfeits that credit. What this page can do is show exactly how much of the benefit you would keep, so the trade-off is visible.

Does this affect my tax code?

It can. The charge is normally collected through Self Assessment, but HMRC can also collect it through PAYE by adjusting your code, and since 2025 there has been an option to pay it through PAYE without filing a return. Either way the amount is the same — this page works out how much, not how it is collected.

Where these figures come from

  1. Child Benefit: What you’ll getGOV.UK checked
  2. High Income Child Benefit ChargeGOV.UK checked

What a pension sacrifice would recover