HMRC have launched a new service allowing employees liable for the High-Income Child Benefit Charge (HICBC) to pay the charge through PAYE, thereby removing the requirement to report via a Self Assessment return.
Previously, high earners liable to pay the High-Income Child Benefit Charge (HICBC) could only do so by submitting a Self Assessment (SA) return.
A new service, which was announced in the 2025 Spring Statement, has now gone live, meaning that the HICBC may be collected through PAYE instead.
The HICBC is a tax charge that claws back child benefit from individuals who earn above a certain threshold. The charge:
- Applies to individuals with Adjusted net income between £60,000 and £80,000.
- Applies per household. If both partners earn above the threshold, the highest earner pays the charge.
- Claws back the child benefit at a rate of 1% for every £200 above £60,000.
Individuals can now pay the HICBC through PAYE if they:
- They are employee.
- They have no reason to submit a Self Assessment other than to report the HICBC.
The deadline to opt in for the charge to be collected via PAYE is 31 January in the year after the liability is due, i.e. for 2024-25, the deadline to opt in is 31 January 2026.
- Individuals can opt in to have their HICBC charge collected via PAYE by using a new online form.
- Where an individual is currently in self-assessment, they must first deregister by calling HMRC. They can then use the online service the following day.
The new service is expected to simplify the process for employees by removing the requirement to register for, and complete, a Self Assessment return.
The Institute of Chartered Accountants in England and Wales (ICAEW) have warned that where the HICBC is due for both 2024-25 and 2025-26, two HICBC amounts might be recovered in a single PAYE code (either in 2025-26 or 2026-27), depending on when an individual uses the HICBC PAYE service and hen they file their 2024-25 tax return.
Useful guides on this topic
High-Income Child Benefit Charge
What is the High-Income Child Benefit Charge? Who pays it? Can you appeal against an assessment? Are there any useful cases from the tax tribunals?
How to work out the High-Income Child Benefit Charge
How do you work out the High-Income Child Benefit Tax Charge?
Adjusted Net Income
What is Adjusted Net Income? How do I calculate it? Why is it important?
External link
GOV.UK: High-Income Child Benefit Charge