If you’ve recently received one of those “please check if you need to pay the High‑Income Child Benefit Charge (HICBC)” letters from HM Revenue & Customs — don’t panic. The good news is this blog walks you through what the letter means, what steps to take and how to stay on the right side of things.
What does the letter mean
The letter will typically say that HMRC has identified your “adjusted net income” (ANI) for the tax year 2024-25 and/or 2025-26 as £60,000 or more, and that you or your partner receives (or has received) Child Benefit payments. It then invites you to check whether you might need to pay the HICBC.
If you or your partner receives Child Benefit and your individual adjusted net income is £60,000 or more in one of those years, you may need to pay the charge.
Importantly, it is based on individual income and not necessarily the combined household income.
Why the threshold matters
Since 6 April 2024, the threshold where the HICBC begins to apply is £60,000. Once your adjusted net income reaches that point, the charge applies on a taper until you hit £80,000, at which point you could face the full amount of Child Benefit being clawed back. So:
- If your ANI is below £60,000, generally no HICBC.
- Between £60,000 and £80,000: you may pay a proportion of the Child Benefit received.
- At or above £80,000: you may need to repay all of the Child Benefit you received in that year.
That’s why HMRC is sending “nudge” letters — they believe you may fall into that bracket and they want you to check rather than wait for you to discover it yourself.
What you should do immediately
Here’s a practical step-by-step:
- Check exactly what income HMRC estimates your adjusted net income (ANI) to be. In the letter, they’ll usually say their records show your ANI is at or above £60,000 for the relevant tax year.
- Work out your actual ANI. This means your taxable income before personal allowances, including savings interest, dividends, etc. Gift Aid etc. are excluded.
- Check whether you or your partner gets Claim Benefit. Even if you opted out of receiving Child Benefit payments, you may still be counted as “in receipt” for the purposes of the charge if you or your partner has entitled you to them.
- Decide how you’ll pay (if the charge applies). You’ve got two main options:
- Pay the charge through your tax code (via PAYE) if you only have salary income and meet the conditions listed.
- Alternatively, register for Self Assessment and pay the charge via your tax return. The letter will explain this.
- If you cannot use the Pay-through-tax-code option (for example, you have other non-salary income), then you must register for Self Assessment, fill in the return on time and pay by the deadlines (for 2024-25 by 31 January 2026; for 2025-26 by 31 January 2027).
- If you have extra support needs — for example, health or personal circumstances that make it hard to deal with HMRC — tell them. The letter makes this point.
- If in doubt, seek professional advice. Tax on benefits, income and charges can be complex, and this is one of those areas where mistakes can lead to penalties.
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Common questions and things to watch
Is it worth claiming Child Benefit even if you’re over the threshold?
Yes, very often it is worth claiming even if you’ll pay the charge because the claim gives valuable National Insurance credits (for example, for your partner) and helps protect a child’s entitlement to a National Insurance number, etc.
What about household income vs individual income?
The charge depends on the highest earner’s adjusted net income in the household. That means two partners each earning £55,000 (so total £110,000) may not be liable, whereas one person earning £65,000 would be.
Can you avoid it?
If you don’t want the payment and don’t want to pay the charge, you can choose to opt out of Child Benefit payments. You’ll still have claim status (which retains NI credits) but won’t receive the cash payment, which then removes the charge.
What happens if you don’t act?
If you receive the letter and ignore it, you risk HMRC calculating the charge, adding penalties or interest for late filing/payment. The letter emphasises you may be liable and underscores the risk if you fail to register or pay.
Strategic tips
- Check whether you can reduce your ANI — for example, by making pension contributions or taking allowable reliefs — so you fall below £60,000. While this should only be done with professional advice, it may reduce your exposure.
- If your income is likely to hover between £60,000 and £80,000, then calculate how much Child Benefit you actually receive vs how much charge you will pay — it may still work out positive.
- Opting out of payments is not a simple “never claim again” step. If circumstances change (e.g. your income falls), you may want back-payments of Child Benefit and claimants often miss this because they didn’t claim in the first place.
- Keep accurate records of your income, dividends, interest, reliefs, etc. The adjusted net income concept includes more than just salary.
- If you receive the letter but believe HMRC’s figure is wrong (for example, you had a one-off high income year or reliefs weren’t included), raise it promptly and get documentation in order.
What this letter means for you going forward
The letter is not necessarily saying “you must pay this charge right now”. It is more of a nudge to alert you that HMRC’s records show you may be at risk of liability. You still have the chance to act and check whether the rules actually apply to your situation.
If you are liable and you choose to pay via PAYE or via Self Assessment, you’ll stay compliant, avoid penalties and maintain peace of mind. If you are not liable (for example, your actual ANI is under £60,000 or you opted out of Child Benefit payments), you still should keep a record of how you arrived at that conclusion.
Finally, receiving the letter is a signal to take this seriously rather than something you can ignore. It’s relatively straightforward to check, but if you delay, it can become more complex and costly.
