People earning more than £60,000 a year have a new way to manage their child benefit repayments following a change in HMRC’s process, according to a senior payroll professional.
Julie Gunnell, Associate Director of Payroll Growth at international accountancy and business advisory group Azets, said those who were eligible could now manage their High Income Child Benefit Charge (HICBC) repayments monthly.
“Previously, people who had to repay HICBC had to do so via a self-assessment tax return, but that changed at the end of September when HMRC announced that it could be done through PAYE,” she said.
“Now, staff can have their HICBC repayments automatically collected every month through their PAYE code if they don’t have any other reason to complete a self-assessment tax return. HMRC will update the code so the repayment is spread evenly throughout the year – much like income tax or student loan repayments."
“However, it’s worth being aware that if you opt in part-way through a tax year you will have less time to repay and will find there’s a larger deduction made via your tax code – but this will only be temporary. If you’re eligible and register for this, it will save you time and reduce the risk of an unexpected bill at the end of the tax year.”
The High Income Child Benefit Charge applies where a parent or partner earns more than £60,000 per year and receives Child Benefit. To pay via PAYE for the 2024–25 tax year, eligible employees must register with HMRC by 31 January 2026 and you only need to register once.
HMRC will issue the appropriate tax code adjustments to employers so the HICBC can be automatically collected via payroll from the month after you register.
Julie Gunnell added:
“This is a great opportunity for people to manage their child benefit repayments through their PAYE and remove the need to complete an annual self-assessment, but the clock is ticking when it comes to registration."
“My advice to those who are eligible for this option is to register as soon as possible via the Government website or the HMRC app.”
