High Income Child Benefit Charge 2026/27 — £60k/£80k Taper & Examples

The High Income Child Benefit Charge (HICBC) is a tax charge that claws back Child Benefit when the higher earner in a household has adjusted net income over £60,000. The charge starts at 1% of the Child Benefit received for every £200 of income above £60,000, and reaches 100% — the entire benefit — once income hits £80,000. For the 2026/27 tax year these are the thresholds HMRC applies, so a household with income between £60,000 and £80,000 keeps only part of its Child Benefit. Estimate the charge with the HICBC Calculator→, and model pension contributions against the charge with the Salary Calculator→.

The charge is calculated on the higher earner's income alone, never the household total, and it applies to every family receiving Child Benefit regardless of how many children they have. The good news: Child Benefit itself remains tax-free income, and the charge is a self-assessed tax settled through Self Assessment or a tax code adjustment.

Child Benefit Rates 2026/27

Child Benefit is usually paid every four weeks, but the HICBC is calculated on the annual entitlement. Families with one child have a smaller annual figure, so the same percentage taper produces a smaller charge — but the percentage itself depends only on income, not on family size.

How the Taper Works

The charge is a percentage of the annual Child Benefit entitlement: 1% for every £200 of adjusted net income above £60,000. Adjusted net income is total taxable income (salary, bonuses, dividends, interest, rental profits) minus pension contributions and Gift Aid donations.

The taper is linear: £10,000 of income above £60,000 means 50% of the benefit received is clawed back. Because the charge is a percentage of benefit rather than of income, it cannot exceed the benefit received for the relevant period.

Real Calculation Examples

Example 1: One child, income £65,000. Income exceeds £60,000 by £5,000. Divide by £200: 25 steps, so 25% of the benefit is charged.

Example 2: Two children, income £70,000. A £10,000 excess gives a 50% charge on the larger two-child entitlement.

Example 3: Three children, income £80,000. Income reaches the full-charge threshold, so the entire £3,268.20 is repaid.

Who Pays and How

The charge is assessed on the higher earner — if you earn £70,000 and your partner earns £35,000, you pay, even though the household income is only £105,000. If both earners are above the thresholds, the higher earner is assessed. The charge is collected through Self Assessment if you already file, or through your PAYE tax code if you do not, and interest applies from 31 January if it is paid late. A common trap is income that fluctuates: a bonus that takes you over £60,000 for one year triggers the charge for that year only, so check every tax year independently.

Should You Opt Out of Child Benefit?

Some higher earners opt out to avoid receiving payments that would later be clawed back. You can instead keep receiving Child Benefit and settle the charge, or remain registered while opting out of payments. Remaining registered preserves National Insurance credits, and if income varies you can restart payments when the charge no longer applies. Any charge for payments received before an opt-out remains due.

Salary Sacrifice and the Charge

Salary sacrifice is the most efficient way to manage the HICBC because it removes income before PAYE sees it. Sacrificing £10,000 of a £70,000 salary into a pension drops adjusted net income to £60,000, eliminating the charge, saving 40% income tax on the sacrificed amount, and cutting 2% National Insurance on earnings above £50,270 — all while the full £10,000 goes into the pension. The same logic applies to cycle-to-work schemes and some other salary sacrifice benefits, which reduce gross pay for HICBC purposes. By contrast, a personal pension contribution made from taxed income also works, but you must claim the higher-rate relief on your return. Parents near the £60,000 boundary should check whether their employer offers pension sacrifice before the year end, because the double saving of tax plus HICBC makes it unusually valuable.

Reduce the Charge with Pensions

Because the taper tests adjusted net income, pension contributions made personally or via salary sacrifice reduce the tested figure. A parent earning £70,000 with two children who contributes £10,000 to a pension drops to £60,000 and eliminates a £1,168.70 charge — while also building retirement savings with any applicable tax relief. Gift Aid donations work the same way. If you are near the £60,000 or £80,000 boundary, run the numbers before the tax year ends on 5 April 2027, because contributions made in March 2027 may count for the whole year subject to scheme processing.

What About Income Just Below £60,000?

If your adjusted net income is £60,000 or less, you are outside the HICBC for 2026/27. Above £60,000, the charge is 1% of the Child Benefit for every £200 of adjusted net income above the threshold, up to the full benefit. The exact amount therefore depends on the benefit received and the income calculation; use the current HMRC rules rather than treating a single example as universal.

Build the adjusted-net-income calculation

Start with taxable income for the individual who may be liable, not the family's gross pay. Include salary, bonuses, taxable benefits, self-employment profits, rental profits, savings interest, dividends and taxable pension income where relevant. Then apply the adjustments HMRC permits for adjusted net income, such as qualifying pension contributions and Gift Aid. Keep the tax year beside every figure. A gross salary statement can omit a bonus, benefit in kind or investment income that changes the charge.

If both partners are above £60,000, compare their adjusted net incomes and identify the higher one. Do not split the charge between them or add the two incomes together. If Child Benefit is paid for only part of the year, use the benefit actually received or due for that period and record the date payments stopped. A household change, new child, separation, death, or a change in who claims can change the annual benefit amount and the person responsible for the charge.

Claim, opt-out and payment records

Keep the Child Benefit award notice, payment history, opt-out confirmation, payslips, P60, P11D, pension statements, Gift Aid records and Self Assessment calculation. If HMRC collects the charge through PAYE, check the tax code and compare the year-end result with the charge calculated from the actual benefit. If you already file Self Assessment, include the charge on the return and keep the payment reference; a tax-code adjustment does not remove the underlying liability.

Opting out is a payment decision, not the same as cancelling the claim. Confirm when the opt-out takes effect and whether National Insurance credits remain protected. If income falls below the threshold later, restart payments through the official Child Benefit route rather than assuming the old instruction has automatically changed.

Planning cautions

Do not make a pension contribution solely to avoid HICBC without considering annual allowance, access, employer matching, cash flow and the contribution method. Salary sacrifice changes contractual pay and has separate employment and minimum-wage rules; a personal contribution may use a different relief mechanism. Gift Aid reduces adjusted net income but also represents a real charitable donation. Compare the charge saved with the full cost and keep evidence of the transaction date.

Check the Charge Against the Final Tax Year

The most reliable review is a dated bridge from payslips and other records to adjusted net income. Start with employment income and add bonuses, taxable benefits, dividends, interest, rental profit, self-employment profit and pension income that belongs to the individual. Then subtract only the adjustments HMRC permits for adjusted net income. Keep the gross figure, each adjustment and the final tested amount visible; do not use a household total or a net-pay figure as a shortcut.

Reconcile the result after the P60, P11D, dividend statements and pension or Gift Aid certificates arrive. If a tax-code adjustment was made during the year, it is evidence of collection, not proof that the annual charge was calculated from the correct Child Benefit amount. Compare the award notice and payment dates with the income timeline, especially where a child was added, payments stopped, parents separated or the higher earner changed.

If the final income is near a boundary, keep both the charge scenario and the no-charge scenario. Record whether the proposed pension contribution is salary sacrifice or a personal payment, the date it was made and the effect on annual allowance and cash flow. This makes it possible to correct the Self Assessment return or PAYE record without treating the calculator estimate as the final liability.

Action Plan for 2026/27

Frequently Asked Questions

Estimate your charge with the HICBC Calculator→, then read the 60% Tax Trap guide for the allowance taper and the Pension Annual Allowance guide before making contributions. Families with income inside the taper band should review their position each tax year; a bonus or pay rise can change the charge, while any pension decision depends on scheme terms, relief and allowance rules.

Official sources

• GOV.UK: High Income Child Benefit Charge
• GOV.UK: Child Benefit rates and allowances
• GOV.UK: Opt out of Child Benefit payments
• GOV.UK: Adjusted net income