A High Income Child Benefit Charge (HICBC) applies where at least one spouse or partner has income in excess of £50,000 child benefit will gradually be clawed back, with a full claw back at the point where the income exceeds £60,000. The HICBC is assessable on the highest household earner only.
Where income is between £50,000 and £60,000 the claw back is at a rate of 1% of the full child benefit received for each £100 of income above £50,000.
Income for these purposes is “Adjusted Net Income” (ANI) which includes all taxable income, less grossed up gift aid payments and pension contributions.
HICBC is assessed through the highest earner’s Self-Assessment Tax Return.
To avoid the HICBC it is possible to elect not to receive child benefit at all. Once an election is made it will be possible to revoke this if, subsequently the ANI falls below £60,000.