People earning over £60,000 may owe HMRC money | Personal Finance | Finance
Brits have been warned that they should check what they should repay to see if they could owe HMRC money.
Parents earning more than £60,000 are being urged to check whether they need to repay Child Benefit – or risk an unexpected tax bill. HMRC has issued a reminder highlighting the High Income Child Benefit Charge (HICBC), which applies when at least one person in a household crosses the earnings threshold.
In a post on X, HMRC said: “Earning over £60k? Check if you need to pay the High Income Child Benefit Charge.”
It added that families can now use a new digital service to settle the charge through their salary if they are not already in Self Assessment, describing the process as “quick and easy with the HMRC app or online.”
Who is affected
The charge applies if:
- You or your partner receive Child Benefit
- And either of you has an adjusted net income above £60,000
The threshold was increased from £50,000 to £60,000 from the 2024–25 tax year.
Once income exceeds £60,000, some of the benefit must be repaid. At £80,000 or above, the full amount is clawed back.
The repayment works on a sliding scale:
- Families repay 1% of their Child Benefit for every £200 earned above £60,000
- For example, someone earning £67,600 would repay 38% of their benefit.
What counts as income
HMRC says the calculation is based on adjusted net income, which includes:
- Salary
- Savings interest
- Dividends
This figure is worked out before personal allowances but after certain reliefs such as pension contributions and Gift Aid.
How to pay
There are two main ways to pay the charge:
- Through Self Assessment
- Or via PAYE, deducted automatically from salary
The PAYE option is now being promoted more heavily, allowing employees who do not normally file tax returns to avoid registering for Self Assessment.
Once set up, HMRC adjusts your tax code and collects the charge automatically.
Key deadlines and rules
PAYE can only be used if it is before January 31 ollowing the relevant tax year.
If you already file a tax return for other reasons, you must still use Self Assessment
If both partners earn above the threshold, the higher earner pays the charge
Opting out
Families can choose to stop receiving Child Benefit payments altogether to avoid the charge.
However, even if payments are stopped, it is still worth registering because it preserves:
- National Insurance credits towards the State Pension
- Automatic allocation of a National Insurance number for the child at age 16
Why it matters
The warning comes as many households drift into the higher income bracket due to pay rises, potentially triggering the charge without realising.
HMRC is urging parents to check their position and use its online tools to avoid being caught out.
More details can be found here.
