Thousands are facing changes to Child Benefit repayments this summer

Significant changes to the way that families make Child Benefit repayments to HM Revenue and Customs (HMRC) are coming soon.

As of this summer, many families will no longer need to file a Self-Assessment tax return and will instead be able to report their Child Benefit payments and pay the High Income Child Benefit Charge (HICBC) directly through their PAYE tax code.

How do the changes work?

The system of paying directly through PAYE is designed to be simpler than Self-Assessment, giving eligible employed parents an easier time with their filings.

If there are those who prefer to pay the HICBC through Self-Assessment, then they are at liberty to continue doing so.

For any taxpayer who is required to complete a Self-Assessment tax return for other reasons, such as if they are self-employed, then the HICBC will steed need to be declared in these returns.

What is the HICBC?

Where one person earns £60,000 or more, the HICBC acts as a charge on that family.

They have to pay back Child Benefit at one per cent for every £200 they earn over the threshold.

If either parent has an income above £80,000, then the full Child Benefit must be paid back.

Paying back Child Benefit does not diminish the other perks of Child Benefit, so these families are still eligible for National Insurance credits and a National Insurance number for each child when they turn 16.

Therefore, it continues to be wise to register for Child Benefit even if you do not get the financial aspect of the scheme.

What should I do now?

Register with HMRC’s online service to pay your HICBC through PAYE.

When the service goes live, HMRC will contact you.

If you have opted out of Child Benefit payments in the past, you can opt back in by restarting your payments online or via the HMRC app.