Thousands of households receiving Child Benefit will now have the option to settle the high income tax charge directly through their tax code for the first time.
Child Benefit amounts to £26.05 weekly for the first child and £17.25 for each additional child. Eligibility for Child Benefit is based on caregiving responsibilities, but individuals with high incomes may be required to repay a portion of the benefit.
Individuals earning over £60,000 must repay 1% of their Child Benefit for every £200 earned above this threshold, referred to as the High Income Child Benefit Charge. Once earnings surpass £80,000, the entire Child Benefit must be repaid. Previously, the high income charge was settled through self-assessment, but now, the option exists to pay it via the 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.
Opt-in by January 31, 2026, for the 2024/25 tax year that concluded on April 5, 2025. If self-assessment is your norm, the PAYE option is not applicable. High-income households can claim Child Benefit without receiving payments, maintaining National Insurance credits for the state pension without incurring the charge.
Child Benefit, utilized by over seven million families, is accessible for children under 16 or under 20 engaged in approved education or training. Claimants must provide care or financial support equivalent to Child Benefit amounts to qualify for payments.
Dan Tomlinson, Exchequer Secretary, emphasized the simplification of tax procedures through HMRC modernization. The new system streamlines the payment of the High Income Child Benefit Charge, alleviating the need for additional tax filings.
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