Child benefit is claimed by most families with children under 18 years of age. However, if you or your partner earn more than £50,000 and claim it you may need to pay a tax charge called ‘High Income Child Benefit Charge'.

Many people that may have moved into a new job or had a promotion that may have substantially increased their salary may not realise that they are liable to pay the charge; this may affect you if your salary including benefits exceeds £50,000.  This could result in having to pay back your child benefit and this is done through your tax return, this is exasperated if you continue to claim it and don’t declare it, any overpayments of child benefit can be backdated and collected by HMRC up to six previous tax years.

The HMRC has a tax calculator which you can use to work out how much High Income Child Benefit Charge you would need to pay – HMRC Child Benefit Tax Calculator.

What can high earners with children do to reduce tax?

 If you or your partners earn between £50,000 and £60,000 per year and you have children, you have a number of options.

1. Stop claiming child benefit only if anyone income is in excess of £60,000
2. Claim the benefit as you may be entitled to keep some if the pay is between £50,000 and £60,000 (use the calculator to see) and pay the tax charge on what element is due back

If you decide to continue to claim child benefit, then you can look at ways of reducing your tax liabilities. One method that is commonly used is to pay more into your pension, this reduces your net income and you do not have to pay the extra tax charge.

Another way of reducing your net income is to opt to use some of your salary for childcare vouchers if your employer uses this scheme.

If you or your partners are earning more than £50,000 net income or you are reaching this threshold you can contact us and we can advise you on the best course of action for you and your family. You can call us on 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it..