Published 2 April 2024 by Matthew Coates
HIBC is where you have to repay some of the child benefit you have received, if you or your partner earn over the allowable amount. For the 2024/25 tax year, the amount you can earn before paying any child benefit back is increasing to £60,000, whilst the maximum cap is increasing to £70,000.
“Earnings” does not just relate to income from your job or self-employment. It will also include interest from savings and dividends. If one of you has a total income of over £60k then the partner earning this amount will be required to repay some child benefit. If you both earn over £60k, then the partner with the highest income is responsible for the repayment.
If this applies to you, then you will need to register for self-assessment returns and fill in a tax return at the end of the year, reporting the amount to repay, and then make your tax payment. Alternatively, you can opt out of receiving child benefit payments so that you do not need to make any repayments, or complete a tax return.
HMRC have a child benefit calculator where you can work out how much you are able to get from child benefit in a tax year, and also work out the tax charge you or your partner may have to pay back. You can find the calculator tool here.
Useful note – the child benefit tax charge is equal to 1% of the child benefit for every £100 that earnings are above the allowable amount, up to the maximum cap. Based on an allowable amount of £60,000, and a cap of £70,000 – take the amount over £60k and multiply by 1%. This will give you the percentage of your child benefit that you must pay back. If you earn £70k or more, you will pay the whole amount back.