HMRC Warns Parents Earning Over £60,000 About Child Benefit Repayment Rules

HM Revenue and Customs (HMRC) has issued a crucial warning to parents claiming Child Benefit who have recently received a pay rise. If either the claimant or their partner living in the same household receives Child Benefit and earns above the income threshold, they may be subject to the High Income Child Benefit Charge.

In a recent update on X, HMRC stated: “Attention parents! Recently had a pay rise? If you’re now earning over £60,000 and receiving Child Benefit, you may need to pay some of it back. You can use the new High Income Child Benefit Charge service if you don’t already submit a Self Assessment tax return.”

This means that the repayment will be processed through a tax return, and the charge applies to the person in the household earning over the threshold, currently set at £60,000 for the 2024 to 2025 tax year.

The rules also extend to cases where someone not living with the child—such as an ex-partner or grandparent—claims Child Benefit for a child residing with you and contributes equally toward the child’s upkeep. In such scenarios, the individual living with the child who earns over the threshold will be responsible for repaying the Child Benefit claimed by the other party, regardless of whether the child is biologically theirs.

For tax years up to and including 2023 to 2024, the threshold was £50,000. From 2024 to 2025 onwards, earning over £60,000 triggers the repayment obligation.

The repayment amount is calculated at 1% of the Child Benefit for every £200 earned above the threshold. For example, if your adjusted net income is £67,600 in the 2024 to 2025 tax year, you would be £7,600 over the threshold. Dividing £7,600 by £200 gives 38, which means 38% of your Child Benefit will be reclaimed by HMRC.

Parents should carefully review their income levels and understand the potential impact on their Child Benefit payments to ensure compliance and avoid unexpected tax charges.