Question 1

What is the High Income Child Benefit Charge (HICBC) threshold for 2026/27?

Accepted Answer

Under Section 15 of the Finance Act 2024 amending Sections 681B–681H of ITEPA 2003, the HICBC entry threshold is £60,000 of Adjusted Net Income (ANI). If the higher-earning partner in a household has an ANI below £60,000, you retain 100% of your Child Benefit tax-free. The clawback occurs across a £20,000 taper band between £60,000 and £80,000 at a rate of 1% of the total benefit for every £200 of income exceeding £60,000. At £80,000 and above, the tax charge equals 100% of the benefit received.

Question 2

What are the statutory Child Benefit payment rates for 2026/27?

Accepted Answer

For the 2026/27 tax year, statutory Child Benefit is paid at £27.05 per week (£1,406.60 per 52-week year) for the eldest or only child. For each additional child, the rate is £17.90 per week (£930.80 per year). For a family with two children, total statutory Child Benefit is £2,337.40 per year; for three children, it is £3,268.20 per year.

Question 3

How is Adjusted Net Income (ANI) calculated under Section 58 ITA 2007?

Accepted Answer

Adjusted Net Income is your total taxable income (gross salary, bonuses, overtime, taxable benefits in kind, rental profits, and dividends) MINUS gross personal pension contributions (SIPP or Relief at Source payments grossed up by 20%) and MINUS gross Gift Aid charitable donations. Crucially, workplace pension contributions made via salary sacrifice or net-pay arrangements directly reduce your employment income before ANI is determined.

Question 4

Why does the HICBC penalise single-earner households over dual-earner couples?

Accepted Answer

Under Section 681C ITEPA 2003, the charge is assessed strictly on the individual earnings of the highest earner, completely ignoring overall household income. In a single-earner home where one parent earns £80,000 and the other stays at home, the family loses 100% of their Child Benefit. Conversely, in a dual-earner household where both partners earn £59,999 (combined household income of £119,998), neither parent exceeds the £60,000 threshold and they keep 100% of their Child Benefit.

Question 5

How can pension salary sacrifice restore 100% of my Child Benefit?

Accepted Answer

Because pension contributions deduct pound-for-pound from your Adjusted Net Income, making a pension contribution between £60,000 and £80,000 creates an astonishing tax-saving multiplier. If you earn £70,000 and contribute £10,000 to your pension, you save 40% Higher Rate Income Tax (£4,000), 2% Employee NI (£200 via salary sacrifice), and avoid a 50% HICBC clawback (£1,168.70 for two children). A £10,000 pension deposit effectively costs you only £4,631.30—an immediate effective return of over 115%!

Question 6

Should high earners still claim Child Benefit even if subject to a 100% tax charge?

Accepted Answer

Yes! Always submit the Child Benefit claim form (CH2) and simply tick the box to opt out of receiving cash payments. Submitting the claim ensures the non-working or lower-earning parent continues to receive valuable National Insurance credits towards their qualifying State Pension record until the youngest child turns 12. It also guarantees your child is automatically issued a National Insurance number before their 16th birthday without bureaucratic delays.

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