UK Child Benefit High Income Charge 2025: New Threshold Planning

UK Child Benefit High Income Charge 2025

The UK’s 2025 Budget raises the High Income Child Benefit Charge (HICBC) threshold, offering relief to middle-income families. The charge now starts at £65,000 and fully removes Child Benefit at £80,000.

How It Works

Families receive Child Benefit as usual but repay 1% of it for every £100 of income above the threshold through self-assessment. Couples should consider income splitting, salary sacrifice, or pension contributions to stay below the limit.

Planning Strategies

• Make pension contributions or charitable donations to reduce adjusted net income.
• Transfer salary or dividends to lower-earning partners where appropriate.
• Update tax codes or make payments on account to avoid large year-end bills.

Reminder: Even if you opt out of payments, complete the Child Benefit registration to secure National Insurance credits for State Pension eligibility.