The High Income Child Benefit Charge: A Partnership Case Study
Let's look at Tom and his partner Jane. Jane receives Child Benefit for their two children. Tom earns £65,000 and Jane earns £20,000.Because one partner (Tom) has an 'adjusted net income' over £60,000, the family is subject to the High Income Child Benefit Charge (HICBC).
Who is responsible for paying?
The charge must be paid by the partner with the higher income, which in this case is Tom. It doesn't matter that Jane is the one who actually receives the Child Benefit payments.
Calculating the Charge
- Income over the threshold: £65,000 - £60,000 = £5,000.
- Percentage to repay: The charge is 1% for every £200 over the threshold. £5,000 / £200 = 25. So, Tom must repay 25% of the Child Benefit received.
- Total Child Benefit: For two children, this is approximately £2,212 per year.
- HICBC due: £2,212 x 25% = £553.
How to Pay
Because Tom doesn't normally file a tax return, he must register for Self Assessment specifically to declare and pay this £553 charge. Alternatively, the family could choose to stop receiving the Child Benefit payments altogether to avoid the charge.