As announced at the Spring Statement 2025, HMRC will be providing a new service to allow employees to pay High Income Child Benefit Charge (HICBC) through their PAYE tax code. The service is expected to go live from summer 2025.
Details are yet to be released, but what it’s likely to mean is that you will report Child Benefit payment received — either by you or your partner — to HMRC via a new digital service: and where liability to HICBC occurs, it will be factored into your PAYE code and processed like any other deduction from pay.
At the moment, the system is cumbersome. If you are liable to HICBC, there is an obligation to register for self assessment and complete an annual tax return — even if all other income is taxed under PAYE. The new service will therefore take some people out of self assessment and all the deadlines involved.
The HICBC applies where one of a couple claims Child Benefit payments and either one of the couple has what is called adjusted net income over £60,000. Adjusted net income is broadly income after pension contributions, payments under Gift Aid, and some other deductions. It is the higher earner who is responsible for paying the Charge, even if they are not the one claiming Child Benefit.
For more information, please visit https://www.gov.uk/child-benefit-tax-charge
Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
- Business Newsletter 2025
