UK: Tax Changes to High Income Child benefit Charge (HICBC)

From 6 April 2024 the adjusted net income threshold at which child benefit will begin to be withdrawn will increase from £50k to £60k, the first rise since 2013.

Where the benefit was previously withdrawn on a tapered basis in an income band between £50k and £60k, this will now only occur between £60k and £80k at a rate equal to 1% for every £200 of income that is more than £60k.

For individuals with income above £80k, the tax charge = the child benefit payment. 

New claims to child benefit will be automatically backdated by three months, or to the child’s date of birth (whichever is later).

For claims made after 6 April 2024, backdated payments will be treated as if the entitlement fell in the 2024-25 tax year if the backdating would otherwise create a HICBC liability in the 2023-24 tax year.

By April 2026, the government plans to introduce a system where benefit assessments will be made on a household basis, rather than an individual basis. This will require significant reform. 

If you have any questions our F&F tax team are happy to help. 

#FarrellAndFarrell #crossbordertaxadvisors #crossborder #taxadvisors #uktaxadvisors #roitaxadvisors #accountantcountydown #accountantnearme #newryandmourne #HICBC #HighIncomeChildBenefitCharge