HMRC confirms July tax change for £117.22 monthly payments | Personal Finance | Finance

HM Revenue and Customs (HMRC) has confirmed a July tax change for £117.22 monthly payments that will affect thousands of households.

The government department has today (June 29) announced a change that will make it easier for Child Benefit claiming households on a high income to complete their tax return. Following a 3.8% uplift on April 6, Child Benefit is now worth £27.05 per week for the eldest or only child and £17.90 per week for each additional child. This means parents with one child can now get £1,406.60 worth of Child Benefit payments from HMRC per year, which amounts to around £117.22 per month on average over a 12-month period.

But if you or your partner earn more than £60,000 per year then you’ll be subject to the High Income Child Benefit Charge (HICBC), meaning you’ll have to pay some of your Child Benefit back.

This is done at a rate of 1% for every £200 earned above the £60,000 threshold, but if your annual income reaches £80,000 per year or more, then the full amount must be repaid to HMRC.

Claimants subject to this tax charge 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 in two different ways – either by paying the charge through your PAYE tax code or through Self Assessment.

For those who file for Self Assessment, HMRC has today confirmed that from mid-July, the tax charge will be pre-populated on their or their partner’s tax return online in a move intended to make tax returns more accurate.

The announcement comes as HMRC warned there is now only one month to go until the second payments on account deadline hits Self Assessment taxpayers on July 31.

Payments on account are payments towards a customer’s next Self Assessment tax bill and help spread the cost of the tax owed by making payments in two separate instalments.

Each payment is half of the tax the customer owed in the 2025 to 2026 tax year and these payments are due by midnight on January 31 and July 31.

HMRC said: “Payments on account instalments can be paid before a customer has filed their Self Assessment tax return. The deadline for submitting tax returns and paying any remaining tax owed for the 2025 to 2026 tax year is 31 January 2027.

“Filing early means that customers know how much tax they owe sooner. A wide range of online help and support is available on GOV.UK to help people fill in and file their tax return.

“HMRC is also making it easier for customers who are liable to pay the High Income Child Benefit Charge (HICBC) to complete their return accurately.

“From mid-July 2026, around 300,000 Self Assessment customers will have their or their partner’s Child Benefit payment information pre‑populated on their online Self Assessment tax return, making it faster and easier to get it right.”

HMRC said you must pay the HICBC through Self Assessment if you need to send a tax return for another reason, such as if you’re self-employed or each interest on savings or investments.

If it’s later than January 31 in the year after the tax year you need to pay for, then you must pay the tax charge through Self Assessment.

Those who opt out of receiving Child Benefit payments will remain registered for the benefit but won’t receive payments and so won’t have to pay the tax charge, but you’ll still get National Insurance credits towards your State Pension, and a National Insurance number for your child, without them having to apply before they turn 16.