Parents are being advised to carefully consider the impact of Child Benefit thresholds, especially if they receive a promotion or salary increase. From the 2024-2025 tax year, the income threshold for Child Benefit repayments has risen to £60,000.
Only one parent’s income needs to cross this threshold for repayments to apply, not both. Households where an individual earns over £60,000 will have to repay a portion of their Child Benefit, with the requirement to repay it in full once earnings reach £80,000.
This means families with one parent earning above £60,000 may be liable to return some or all of their Child Benefit. Even those currently earning less, such as £50,000, should be mindful, as a raise or a new job could push their income past the threshold.
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Andy Wood, a tax specialist at Tax Barrister UK, explains, “Many families don’t realise that Child Benefit repayments are triggered once one partner’s income exceeds £60,000, based on individual income, not combined household earnings. For instance, a couple earning £59,000 each won’t face a charge, but a single earner making £65,000 will.”
Wood also highlights the importance of adjusted net income, which includes salary plus savings interest, dividends, and other taxable income. “Contributions to pensions and Gift Aid donations can lower your adjusted net income, so it’s important to calculate this fully before assuming you are over the limit.”
He adds, “Some think the best option is to stop claiming Child Benefit once they cross the threshold, but continuing to claim while repaying the charge can still provide valuable National Insurance credits and protect entitlement to the State Pension.”
Parents should review their income and benefits status carefully to avoid unexpected repayments and to make informed decisions about claiming Child Benefit.