Who pays the HICBC?
Posted on 27th February 2023 by Joanne Stoneman
If a family receives child benefit and the person it’s paid to or their partner has adjusted net income (ANI) of more than £50,000 for the tax year, the one with the highest income must pay the high income child benefit charge (HICBC).
If a family receives child benefit and the person it’s paid to or their partner has adjusted net income (ANI) of more than £50,000 for the tax year, the one with the highest income must pay the high income child benefit charge (HICBC). This is equal to 1% of the amount of the child benefit for every £100 of income over £50,000. So once income reaches £60,000 all child benefit is effectively withdrawn. For example, if your ANI is £55,000, 50% of the child benefit is clawed back.
Just one person in the couple needs to be earning in excess of £50,000, which unfairly penalises single-income households.
If you think you maybe caught this tax year, then you could pay an extra pension contributions before 5 April to reduce your ANI. Alternatively, charitable donations can have the same effect even if they are paid after 5 April.