Child Benefit is a crucial financial support for many UK families, helping with the costs of raising children. While it is generally straightforward to claim Child Benefit through HMRC, high-income households may be subject to the High Income Child Benefit Charge (HICBC), which must be reported on your Self Assessment tax return. This guide explains how to claim Child Benefit, how to report it correctly, and how to manage your tax liabilities effectively.
What is Child Benefit?
Child Benefit is a tax-free payment made to parents or guardians to help with the costs of raising children. It is usually paid every four weeks, with separate rates for the eldest or only child and additional children. As of 2025, the rates are approximately £25.60 per week for the eldest child and £16.95 per week for additional children, but these rates are subject to change each tax year.
Eligibility for Child Benefit
To claim Child Benefit, you must be responsible for a child under 16 (or under 20 if they remain in approved education or training). Only one person can receive Child Benefit for a child, so families should decide who claims.
Even if you or your partner’s income exceeds the threshold for the High Income Child Benefit Charge, you should still consider claiming Child Benefit to ensure your child qualifies for National Insurance credits towards their State Pension, even if you choose not to receive the payments to avoid the tax charge.
High Income Child Benefit Charge (HICBC)
The HICBC applies if you or your partner’s individual income exceeds £50,000 in a tax year. It reduces the benefit by 1% for every £100 of income above £50,000, meaning that at £60,000 or above, the charge effectively cancels out the Child Benefit. However, you must still complete a Self Assessment tax return to declare the charge, even if you opt out of receiving payments.
How to Claim Child Benefit
You can claim Child Benefit online or by post using the CH2 form. To claim:
- Visit the official HMRC website and complete the Child Benefit claim form (CH2).
- Provide your child’s birth certificate or adoption certificate.
- Submit the form by post or online following the HMRC instructions.
- Once processed, you will receive a Child Benefit number, and payments will start being paid into your bank account.
It’s advisable to claim Child Benefit as soon as your child is born or comes to live with you to avoid missing payments.
Reporting Child Benefit on Your Tax Return
If you or your partner’s income exceeds £50,000, you must report your Child Benefit on your Self Assessment tax return. Here’s how:
- Gather Information: Know the amount of Child Benefit received during the tax year. HMRC provides this in your annual Child Benefit statement or through your personal tax account.
- Log In: Access the HMRC Self Assessment portal using your Government Gateway ID.
- Complete the HICBC Section: On the tax return, locate the section for the High Income Child Benefit Charge and enter the details of your benefit payments and the number of children claimed for.
- Calculate the Charge: HMRC’s system will automatically calculate the tax charge based on your income and the benefit amount.
- Review and Submit: Double-check all information before submitting your return to avoid errors and potential penalties.
Even if your partner claimed the Child Benefit but your income is higher, you are still responsible for declaring and paying the charge if it applies to you.
Calculating the HICBC
The charge is calculated at 1% of the Child Benefit for every £100 of income over £50,000. For example:
- If your income is £55,000 and you received £1,200 in Child Benefit, the charge would be 50% of £1,200, or £600.
- If your income is £60,000 or more, the charge would be 100% of £1,200, effectively cancelling out the benefit payment through the tax charge.
It’s crucial to keep accurate records of your income and benefit payments to calculate this charge correctly on your return.
Can You Opt Out of Receiving Child Benefit?
Yes. If you or your partner’s income exceeds £60,000 and you wish to avoid the HICBC, you can choose to opt out of receiving payments by contacting HMRC. However, it’s still wise to register for Child Benefit even if you opt out, as this ensures your child receives National Insurance credits, protecting their future entitlement to the State Pension.
National Insurance Credits and Child Benefit
Claiming Child Benefit, even if you opt out of payments, helps build your National Insurance record. This is especially important for parents who take time off work to care for children, as it helps protect their State Pension entitlement. Missing out on credits could mean receiving a lower pension in the future.
Penalties for Not Reporting the HICBC
If you fail to declare and pay the HICBC on your Self Assessment tax return, you may be subject to penalties and interest charges from HMRC. Even if your partner receives the benefit payments, the higher earner is responsible for reporting and paying the charge. Filing and paying on time helps you avoid unnecessary penalties.
Getting Help with Your Tax Return
If you’re unsure how to report Child Benefit or calculate the HICBC, consider seeking professional advice. A tax adviser or accountant can help ensure your tax return is accurate and that you’re not missing any potential reliefs or allowances.
Conclusion
Claiming Child Benefit provides vital financial support for families, but high-income households need to be aware of the High Income Child Benefit Charge. Understanding how to claim Child Benefit, how to report it on your tax return, and how to manage the HICBC can help you avoid penalties and ensure you’re receiving all the entitlements and credits you deserve. By staying informed and organised, you can navigate the process with confidence.
