The High Income Child Benefit Charge: 1% of the benefit for every £200 over £60,000, all of it repaid at £80,000, worked for a client with two children

A paraplanner is preparing the review pack for a client on £65,000 with two children, whose partner earns less. Nothing on the income tax rates table mentions Child Benefit, yet the household may owe back a quarter of it. This guide works through two GOV.UK pages and the arithmetic.

The rule on GOV.UK

The charge page says the threshold is over £60,000 for tax years starting from 2024 to 2025 (it was £50,000 up to and including 2023 to 2024). The measure is adjusted net income. In the page's words: "You'll pay back 1% of your Child Benefit for every £200 you earn over £60,000." And: "If you earn over £80,000 you'll pay it all back."

Other points on the same page:

• If both partners are over the threshold, the higher earner pays the charge.
• The charge can be paid through PAYE if the client does not need a tax return for another reason. Otherwise it goes through Self Assessment.

The rates page shows £27.05 a week for the eldest or only child and £17.90 for each additional child. It did not say which tax year those rates belong to, so check the year before relying on the figures below.

Why the band ends at £80,000

The band is £80,000 - £60,000 = £20,000 wide. At 1% for each £200, that is £20,000 / £200 = 100 steps of 1%, which reaches 100%. That matches the page.

The Child Benefit to be repaid

Our assumption: 52 weekly payments in the year. Some years have 53, so check the client's actual payments.

Check: £1,406.60 + (£17.90 x 52 = £930.80) = £2,337.40.

The charge at four incomes

Percentage = (income - £60,000) / £200. I have taken round incomes that fall exactly on a £200 step. How HMRC treats incomes between steps was not read.

Check on the £75,000 row for two children: £2,337.40 x 0.75 = £1,753.05, and £2,337.40 x 0.25 = £584.35, which together make £2,337.40.

What the next £1,000 costs

Each £1,000 of extra income in the band is 5 steps, so 5% of the benefit.

This assumes the client is already a higher-rate taxpayer, which anyone over £60,000 in England, Wales or Northern Ireland is, since the higher rate starts at £50,271. The 40% figure comes from the GOV.UK rates page read in the Personal Allowance taper guide. Scottish bands were not read.

A client who moves from £65,000 to £75,000 pays £1,753.05 - £584.35 = £1,168.70 more charge, plus £4,000 more tax: £5,168.70 on £10,000, or 51.7%.

What to put on the review note

• Adjusted net income, not salary. The page uses adjusted net income, and says it is worked out after reliefs such as pension contributions and Gift Aid. A client at £65,000 who reduces adjusted net income by £5,000 reaches £60,000 and the charge on this example falls from £584.35 to nil. The tax relief on the contribution is separate and not worked here, and whether the contribution fits the client's allowances is for the adviser.
• Who is the higher earner. The charge falls on one partner, so compare both incomes.
• How it is paid. Whether the client is in PAYE or Self Assessment changes when the money leaves their account.
• Number of children and the rates. Recalculate when a child leaves Child Benefit, and check the year of the rates.

For the rest of the review file, see the annual review checklist, the tapered annual allowance example and the worked pension carry forward example.

Overlyft builds AI staff who join your advice team and read your client list before each review season, flag clients with children whose income sits between £60,000 and £80,000, and prepare the one-page repayment comparison for the adviser to approve.

This is general information, not financial advice. Check GOV.UK and the client's circumstances before you advise.