PAYE for High Income Child Benefit Charge
Details are yet to be released, but what it’s likely to mean is that you will report Child Benefit payment received — either by you or your partner — to HMRC via a new digital service: and where liability to HICBC occurs, it will be factored into your PAYE code and processed like any other deduction from pay.
At the moment, the system is cumbersome. If you are liable to HICBC, there is an obligation to register for self assessment and complete an annual tax return — even if all other income is taxed under PAYE. The new service will therefore take some people out of self assessment and all the deadlines involved.
The HICBC applies where one of a couple claims Child Benefit payments and either one of the couple has what is called adjusted net income over £60,000. Adjusted net income is broadly income after pension contributions, payments under Gift Aid, and some other deductions. It is the higher earner who is responsible for paying the Charge, even if they are not the one claiming Child Benefit.
