Changes to the income thresholds for the claw-back of child benefit coming into force on 6 April 2024 will mean that some higher-income parents should reapply to have child benefit reinstated.
The Spring Budget 2024 increase in the thresholds for the High Income Child Benefit Charge (HICBC) mean that there is no claw back until an individual has an income of £60,000 p.a. (it was £50,000 p.a. up to 5 April 2024). The threshold for the claw back of child benefit has also increased from £60,000 to £80,000.
The Institute of Chartered Accountants in England and Wales (ICAEW), note that claimants should review their situation for next year. Giving a typical example of a person earning £65,000 per year will have the full amount of child benefit clawed back for 2023/24. Rather than having to pay HICBC, they may have chosen not to receive child benefit. For 2024/25, HICBC will claw back only 25% of the child benefit. Therefore, the person may wish to consider claiming child benefit to keep 75% of it.
The ICAEW also notes that claiming child benefit also protects your entitlement to contributory benefits such as the state pension, because claimants are automatically awarded class 3 NICs benefits. The government has announced that it will change this rule, probably from April 2026.
How to work out the High Income Child Benefit Charge
FREEVIEW: guide that shows you how to calculate the HICBC
Spring Budget 2024
Some wide-ranging reforms with a couple of tax cuts and new relief across a range of different taxes.
External links
