If you are a parent earning a higher income, you may have already stumbled across the High Income Child Benefit Charge (HICBC), perhaps without even realising it.
While recent figures suggest that penalties are now a rarity, this is no time to relax.
Penalty figures drop sharply – but not because the rules have changed
According to the latest statistics, HM Revenue & Customs (HMRC) issued just 46 penalties for HICBC non-compliance in the 2024/25 tax year.
That is a dramatic decline compared to over 13,500 penalties in 2018/19.
However, rather than signalling a softening of the rules, it reflects a change in how HMRC approaches enforcement, moving from punishment to prevention.
The HICBC remains in force, and the responsibility to report and pay it still falls squarely on you.
New threshold, but HICBC structure remains
One notable change is the increase in the income threshold from £50,000 to £60,000, which took effect in April 2024.
This revision has reduced the number of households affected, but the core structure of the charge has not changed.
It is still based on individual income rather than household earnings.
So, if your income exceeds £60,000 and your partner receives Child Benefit (even if you have opted out of the payments), you could still be liable.
PAYE integration is coming – eventually
There is some positive news on the horizon. Plans are underway to allow the charge to be collected through PAYE, potentially simplifying the process for many.
However, this update is not expected to take effect until later this year.
Until then, affected individuals must continue to file a Self-Assessment tax return, a step many still overlook, often because they do not realise they are caught by the rules in the first place.
Do not assume silence means safety
The sharp drop in penalties may give the impression that the HICBC no longer applies, or that HMRC is not checking. Neither is true.
The most common issue remains misunderstanding: the charge is triggered by entitlement to Child Benefit, not necessarily by receiving the money.
Stay ahead of the charge
If your earnings are above £60,000 and Child Benefit is being claimed in your household, it is advisable to double-check your position.
Need guidance on whether you are affected or how to deal with the charge efficiently? Contact us today for expert advice.