Households in receipt of Child Benefit are set to be impacted by a major rule change being implemented by HM Revenue and Customs (HMRC) but will your family be affected?
Parents earning above £60,000 can now settle their High Income Child Benefit Charge via their employer's payroll system rather than completing annual tax returns.
The new arrangement, launched by HMRC on September 23, enables eligible families to have repayments deducted directly from their wages through adjusted tax codes.
This reform impacts thousands of households who must return portions of their Child Benefit payments due to higher earnings.
What do you need to know about recent Child Benefit changes?
|GETTY
Previously, these families were required to complete Self Assessment forms solely to manage this charge, creating administrative burdens for parents with otherwise straightforward tax affairs.
The charge applies when individual earnings exceed £60,000 annually, with families repaying one per cent of their Child Benefit for each £200 earned above this threshold.
Those earning beyond £80,000 must return the entire benefit amount.
Employed parents who don't require Self Assessment for other purposes can utilise the new PAYE collection method.
Child Benefit rules are changing
| GETTYHowever, those with additional filing obligations, such as self-employment or rental income, must continue using Self Assessment to settle the charge.
The system allows HMRC to modify tax codes, spreading repayments throughout the year rather than requiring a lump sum payment.
Dan Tomlinson, Exchequer Secretary, stated: "We're modernising HMRC to make tax simpler.
"Tens of thousands of parents will no longer have to go through the extra effort of filing a tax return as this new simple and straightforward system takes the stress out of paying the High Income Child Benefit Charge (HICBIC)."
He added: "If they sign-up they will then be issued with a new tax code which will reflect their HICBC deduction.
"Any fluctuations in income and Child Benefit entitlement will be reflected in-year in their tax code."
Families have until January 31 2026 to register for the scheme covering the 2024-25 tax year.
Child Benefit provides £26.05 weekly for the eldest child and £17.25 for each subsequent child, supporting more than seven million UK families.
LATEST DEVELOPMENTS:
The cost of benefits is set to rise to £100bn by 2030 | GETTY/PAParents can claim for children under 16, or those under 20 in approved education or training, including A-Levels and NVQs but excluding university courses.
The benefit extends to foster carers when councils don't contribute to accommodation costs, adoptive parents, and relatives caring for children.
Recipients must either live with the child or contribute at least the benefit amount towards their care.
Higher-earning families can claim without receiving payments, preserving National Insurance credits that count towards state pension entitlement whilst avoiding the charge.