HM Revenue & Customs (HMRC) has launched a new system to calculate and collect the High Income Child Benefit Charge (HICBC). The update affects families where one or both parents earn between £60,000 and £80,000 a year each and claim child benefit payments. For every extra £100 a parent earns above £60,000, they lose 1% of the payments they’re entitled to per child.
At £80,000 of earnings, the full benefit is effectively clawed back completely through the tax system. Currently, this has to be assessed by filling out a Self-Assessment tax return, forcing many parents who don’t otherwise need to do the paperwork to file each year.
The new system will directly tax away the child benefit payments entitlement using the earner’s tax code, removing the need for a Self-Assessment. The aim of this is to simplify how the charge is paid and reduce the number of people who need to complete a Self-Assessment tax return.
What has changed
Previously, anyone who earned more than £60,000 a year and either claimed child benefit or lived with a partner who did, was required to pay back some or all of the benefit through the HICBC.
Most affected taxpayers had to register for Self-Assessment and file an annual return, even if this was their only reason for doing so. Under the new system – which is now in effect for the 2024–25 tax year (which ended on 5 April 2025) – HMRC will use real-time pay and tax information it already collects from employers to adjust tax codes directly.
For many people, this means the charge can be collected automatically through their PAYE tax code, removing the need to complete a Self-Assessment return.
Signing up to the new system
Those who may be affected need to register themselves with the new system in order to avoid having to fill out a Self-Assessment return. This can be done on GOV.UK.
You can sign up to this system if you have no other reason for sending a tax return and you are paid through the PAYE system for workers.
The deadline for registering for the system to pay HICBC for 2024–25 is 31 January 2026. You can register online through the Government’s website so the charge can be collected automatically from your salary.
Signing up to the system can help to ensure you don’t face an unexpected tax bill. You will receive slightly less salary each month to offset the child benefits you receive, depending on your income level above £60,000.
Who should still file a Self-Assessment
Some taxpayers will still need to complete a Self-Assessment tax return. This includes people whose income comes from self-employment, rental property, or other sources not captured by PAYE. It also applies if your tax affairs are not straightforward or if HMRC is unable to adjust your tax code to collect the full amount due. If you are already in Self-Assessment for other reasons, you should continue to file as usual.
For families where one partner’s income exceeds the HICBC threshold of £60,000, this update could reduce paperwork but may also lead to unexpected tax and salary adjustments. This is especially salient in households where there is one earner on a higher income, as the spouse who does not work will need to claim Child Benefit to ensure they receive the requisite National Insurance (NI) credits to build State Pension entitlement.
If you have more complex tax affairs or non-salary income, Self-Assessment may still be necessary.
