HMRC Confirms Child Benefit Tax Charges for 2026/27 Tax Year

The HM Revenue and Customs confirmed the application of the High Income Child Benefit Charge (HICBC) for the 2026/27 tax year. Under these rules, households where one partner earns more than £60,000 annually must repay 1% of their Child Benefit for every £200 earned above that threshold. Families with an annual income of £80,000 or more are required to repay the benefit in full.

The charge is calculated based on adjusted net income, which includes dividends and savings interest. This figure can be reduced through pension contributions and Gift Aid donations. Claimants who exceed the income threshold can settle the charge through their PAYE tax code or Self Assessment, or they may choose to opt out of payments entirely.

Tax expert Andy Wood warned that opting out of the benefit to avoid the charge can be counterproductive. He noted that continuing to claim the benefit secures critical National Insurance credits for parents caring for children under 12, which are essential for building the qualifying years required for a State Pension. This is particularly significant for parents on career breaks, those working part-time, or those earning below the National Insurance contribution threshold.