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High Income Child Benefit Charge

Does high income child benefit charge (or HICB) apply to you ? Ask Us !

Helping you through HICB - Total Tax Accountant

What is HICB ?

If you or your spouse / partner earns over £50K annually then you may have to give portion of child benefit back to HMRC as an additional tax. Also known as HICBC High Income Child Benefit Charge. The current charge is 1% of every £100 earned over the prescribed limited of £50K per annum. In a single year with one child the current child benefit rate is upto £1076.40 or up to £1788.80 for two children.

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What is ADI ?

Adjusted net income to test HICBC is the same as one which is used to assess the personal allowance and age concerned of your personal allowance, this is known as adjusted net income. It is a method where all your overall income can be considered less by considering the following deducting the following:

  • Your pension contributions in given tax year
  •  Gross value
  • Trading losses
  • Gift aid payments

Please note your own personal allowance cannot be deducted when calculating your ANI. If your Adjusted net income is below £50K then there will be no HICBC Child benefit tax charge payable.

Is it worth claiming HICB ?

Many people ask this question and it’s not a straight simple Yes or No answer. It all depends on individual circumstances. If both parents are in excess of £60K income and there is not much can be done to reduce their income then yes may not be worth claiming for Child benefit at first place. However if one parent is continuously at home looking after the child then they should claim Child benefit for children up to the age of 12 as this will protect their state pension entitlement by receive national insurance tax credits. Sounds complicated ? No problem, we can help you .