HMRC confirms £1,406 tax charges for UK households | Personal Finance | Finance

HM Revenue and Customs (HMRC) has confirmed £1,406.60 tax charges for high income households claiming Child Benefit.

HMRC eligibility rules mean that households earning above a certain income threshold are subject to pay the High Income Child Benefit Charge (HICBC), meaning some – or all – of Child Benefit payments must be repaid to the tax office. For the 2026 to 2027 tax year, HMRC states that Child Benefit payments must be paid back if an individual income is above £60,000. In this case, you’ll pay 1% of your Child Benefit for every £200 you earn over the threshold.

But for claimants with an even higher income of £80,000 or more, the tax charge is set at 100% meaning all of your Child Benefit must be paid back to HMRC.

Following a 3.8% uplift to Child Benefit rates on April 6, the benefit is now worth £27.05 per week for the eldest or only child under the age of 16, or under 20 if they stay in approved education or training.

As such, it means families can get a total of £1,406.60 in Child Benefit payments over a full year from HMRC. Those with more than one child can get an extra £17.90 per week, which amounts to an additional £930.80 per year.

But if you or your partner exceed the £80,000 income threshold, then 100% of your Child Benefit payments must be repaid, meaning at least £1,406.60 will go back to HMRC – and even higher than this amount if you have more than one child.

Confirming the charge for the 2026/27 tax year, HMRC said: “To work out if your income is over the threshold, you’ll need to work out your ‘adjusted net income’.

“Your adjusted net income is your total taxable income, which includes savings interest and dividends. It’s calculated before any Personal Allowances and less certain tax reliefs, such as pension contributions and Gift Aid. You can use the Child Benefit tax calculator to get an estimate of how much of your Child Benefit you will have to pay back.

“From tax year 2024 to 2025 onwards: If you or your partner earn more than £60,000 a year, you’ll have to pay some of your Child Benefit back. If you or your partner earn £80,000 or more, you’ll have to pay all of it back. You’ll pay back 1% of your Child Benefit for every £200 you earn over the threshold.”

If your adjusted net income is over the threshold and so is your partner’s, then whoever has the higher income is responsible for paying the tax charge.

‘Partner’ refers to someone you’re not permanently separated from who you’re married to, in a civil partnership with or living with as if you were.

As the HICBC charge is based on individual income, rather than household income, some Child Benefit claimants can be caught out by the rules and not realise they face a tax charge.

The charge can also apply if someone else receives Child Benefit for a child living with you, provided they contribute at least an equal amount towards the child’s upkeep.

If your income exceeds the threshold, you can choose to either get Child Benefit payments and pay the tax charge, or opt out of getting payments and not pay the tax charge. If you do opt to pay the tax charge, this can be done through your PAYE tax code or through Self Assessment.

In a warning to claimants, Andy Wood, tax expert at Tax Barrister UK, said: “The key figure parents need to understand is adjusted net income. This is not always the same as salary, as it can include things like savings interest, dividends and other taxable income.

“Pension contributions and Gift Aid donations can reduce adjusted net income, so families should check the full calculation before assuming they are over the limit.

“A lot of people assume Child Benefit should simply be cancelled once they cross the threshold, but that is not always the best option.

“In some cases, continuing to claim Child Benefit while repaying the charge can still protect National Insurance credits and entitlement to the State Pension.”