Spring Statement: high income child benefit via PAYE from August

Will Drysdale, Senior Reporter, Business & Accountancy Daily

Taxpayers facing the high income child benefit charge will no longer have to do a tax return from this summer as HICBC will be deductible through PAYE earnings

From August 2025, employed individuals earning over £60,000 and falling under high income child benefit charge (HICBC) will be able to report their family’s child benefit payments through a new HMRC online service.

Once registered with HMRC, they will be able to opt to pay the HICBC charge directly through PAYE via their company payroll, without having to register to complete a self assessment tax return.

This means that parents with one of the married or civil partnership earning over £60,000 will no longer have to file a self assessment tax return, even if employed.

The new system will be a relief for high earners caught by the HICBC system, which has resulted in confusion for taxpayers and interminable appeals at tax tribunals between taxpaying parents and HMRC.

Currently thousands of employees have been forced to file a self assessment tax return every year, and HMRC case workers have pursued individuals relentlessly, many of whom were not aware they had to pay the charge.

The modernisation of the system is set to cost HMRC only £5m a year to operate from 2026-27, then increasing to £10m in 2029-30.

Although parents will not have to file a tax return, assuming they have no other additional income outside their PAYE earnings, they will have to use the online service to register their PAYE income from August.

There have been several First Tier Tribunal hearings in recent months where HMRC has lost due to postal issues and parents not being aware of their obligations which may be a factor for why this is being introduced.