The £60,000 to £80,000 Child Benefit clawback, and what reduces it
If you or your partner have adjusted net income over £60,000, part of your Child Benefit comes back as a tax charge. At £80,000 or more, all of it does. The charge is 1% of the benefit for every £200 of income above £60,000, and it falls on whichever partner has the higher income, whoever receives the payments.
Adjusted net income is total taxable income before the personal allowance, less gross pension contributions and Gift Aid. It includes salary, self-employed profit, rental profit, dividends and savings interest.
| Adjusted net income | Share repaid | Charge for two children |
|---|---|---|
| £60,000 | 0% | £0 |
| £65,000 | 25% | £584.35 |
| £70,000 | 50% | £1,168.70 |
| £75,000 | 75% | £1,753.05 |
| £80,000 or more | 100% | £2,337.40 |
Figures are based on the current weekly rates of £27.05 for the eldest child and £17.90 for each additional child, over 52 weeks, which for two children is £2,337.40 a year.
Between £60,000 and £80,000 of income, each extra £1 brings 40% income tax, 2% National Insurance and, with two children, about 11.7p of Child Benefit charge. That is roughly 54p in the pound, which is why the range is often called a trap. The same is true for directors drawing dividends and landlords with rising rent.
Sources: GOV.UK: High Income Child Benefit Charge, GOV.UK: Child Benefit rates.
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If your adjusted net income is over £60,000 you repay 1% of your Child Benefit for every £200 over the threshold. At £80,000 or more you repay all of it. The charge falls on the partner with the higher income, whoever receives the benefit.
Yes. Personal pension contributions and Gift Aid donations reduce adjusted net income, so they can cut or remove the charge. A £10,000 gross pension contribution takes income from £70,000 to £60,000, which removes the whole charge and gives higher-rate relief as well.
You can opt out of receiving payments to avoid the charge, but it is usually wise to keep the claim. It can protect National Insurance credits for a parent who is not working or earns little, and it ensures the child gets a National Insurance number.
Usually yes. Unless HMRC collects the charge through your tax code, you register for Self Assessment by 5 October after the tax year ends and report it on the return. Missing it can lead to penalties and back-dated bills.