HMRC's New Service: Paying the HICBC Without Self Assessment
HMRC has launched a new online service that allows employees to pay the High Income Child Benefit Charge (HICBC) directly through their tax code, removing the need for many taxpayers to register for Self Assessment. If you've received a letter from HMRC about this charge, or if either you or your partner has an adjusted net income (ANI) exceeding £60,000 and Child Benefit is being claimed for your household, this new service could simplify your tax affairs considerably.
Contents
Introduction
For years, taxpayers affected by the High Income Child Benefit Charge have faced a difficult choice: either opt out of receiving Child Benefit payments entirely, or register for Self Assessment to declare and pay the charge through a tax return. For many families, particularly those with no other reason to complete a tax return, this has been an unnecessarily burdensome requirement.
Following the announcement in the 2025 Spring Statement, HMRC launched a new digital service in September 2025 that fundamentally changes how the charge can be paid. Employees can now have the HICBC collected directly through PAYE, avoiding the complexity and administrative burden of completing a Self Assessment return.
If you've recently received a letter from HMRC asking you to check whether you need to pay the charge, this article will help you understand your options and how the new service works.
What is the High Income Child Benefit Charge?
The High Income Child Benefit Charge is effectively a clawback mechanism that reduces or eliminates the value of Child Benefit received for higher-income households. The HICBC was introduced to ensure that Child Benefit was not paid to the highest earners.
The charge is calculated based on adjusted net income (ANI), which is your total taxable income before personal allowances and certain tax reliefs. This includes salary, self-employment income, rental income, pension income, interest from savings and dividends. Your ANI is reduced by Gift Aid donations or pension contributions made during the tax year.
Current Thresholds (From April 2024)
Since April 2024, the relevant thresholds have been:
- The charge applies when adjusted net income reaches £60,000 (previously £50,000)
- The charge is calculated at 1% of the Child Benefit received for every £200 of ANI above £60,000 (previously 1% for every £100 above £50,000)
- Child Benefit is fully clawed back once adjusted net income reaches £80,000
How Much is Child Benefit?
For the 2024/25 and 2025/26 tax years, Child Benefit is paid at the following weekly rates:
| Child Benefit Rates | 2024/25 | 2025/26 |
|---|---|---|
| Weekly Rates | ||
| For the eldest or only child | £25.60 | £26.05 |
| For each additional child | £16.95 | £17.25 |
| Annualised Benefit (Full Year) | ||
| For the eldest or only child | £1,331.20 | £1,354.60 |
| For each additional child | £881.40 | £897.00 |
Example:
A family with two children would receive a total annualised Child Benefit of £2,212.60 in 2024/25 (£1,331.20 for the eldest child plus £881.40 for the second child).
If the higher earner in the household has an adjusted net income of £70,000, they would be £10,000 above the £60,000 HICBC threshold.
This means the HICBC would be calculated at 50% (since there are 50 bands of £200 in £10,000), resulting in a charge of £1,106.30 and net Child Benefit retained of £1,106.30 after the HICBC clawback.
Who Does the Charge Affect?
The charge applies to households where:
- Someone receives Child Benefit; and
- Either the claimant or their partner has adjusted net income of £60,000 or more.
Importantly, the charge is assessed on the higher earner in the household, regardless of who actually claims the Child Benefit. This means you could be liable for the charge even if:
- Your partner claims the Child Benefit, not you
- You do not have parental responsibility for the children
- You are not married but live together as a couple
The charge must be paid by the individual with the higher income, not necessarily the person receiving the Child Benefit payments.
New Online Service
Until recently, anyone liable for the HICBC had only two options:
- Opt out of receiving Child Benefit entirely
- Register for Self Assessment and complete a tax return to pay the charge each year
The new service provides a third option for employees: pay the charge directly through your PAYE tax code.
This is a significant improvement for taxpayers who have no other reason to be in Self Assessment. It eliminates the need to register, file annual returns, and manage the administrative burden that comes with Self Assessment.
Key Benefits
- No Self Assessment registration required - if you have no other reason to complete Self Assessment tax return
- Automatic collection - the charge is deducted from your salary throughout the year
- Real-time payment - pay the HICBC in the tax year it relates to
- Simpler administration - once set up, HMRC will automatically update your code when your Child Benefit claim changes
You can access the service at GOV.UK by searching 'High Income Child Benefit Charge' or by visiting www.gov.uk/child-benefit-tax-charge/pay-tax-charge-paye.
Who Can Use the New Service?
The new service is designed for employees who would otherwise have no reason to be in Self Assessment. You can use it if:
- You pay tax via PAYE (e.g. through your employer’s/pension provider’s PAYE scheme)
- Your only reason for being in Self Assessment is the HICBC
- You have not already submitted a Self Assessment return for the tax year
Who Cannot Use the Service
You cannot use the new service if:
- You are registered for Self Assessment for other reasons (such as self-employment income, rental income, or significant investment income)
- You have already submitted a Self Assessment return for the tax year
- You do not pay tax via PAYE
If you are currently registered for Self Assessment but HICBC is your only reason for being registered, you will need to deregister from Self Assessment first before you can use the new service.
Charges for 2024/25 and 2025/26
If you register for the service now and have not yet filed your 2024/25 tax return, you have the option to settle both your 2024/25 and 2025/26 HICBC using the new service.
This means two years' worth of charges will be collected during the 2025/26 tax year. Your tax code will be adjusted to collect:
- The HICBC for 2024/25 (which you have not yet paid); and
- The HICBC for 2025/26 (collected in real time as the year progresses).
From 2026/27 onwards, only the current year's charge will be collected through your tax code.
What Information You'll Need
Before using the service, make sure you have the following information ready:
- Your National Insurance number - you'll need this to sign in
- Your partner's National Insurance number - if they claim Child Benefit
- Details of your adjusted net income - including salary, bonuses, pension income, rental income, savings interest and dividends
- Dates of any relationship changes - if you started or ended a relationship during the tax year
- Proof of identity - HMRC may request a passport or driving licence when signing in or creating a Government Gateway account
If you have previously been registered for Self Assessment, you must deregister before using the service. You can do this online through your Government Gateway account.
Changes in Circumstances
Once you have registered for the new service, HMRC will automatically update your tax code when certain changes occur to the Child Benefit claim, including:
- A new child is born or adopted
- A child reaches age 16 (unless they remain in approved education or training)
- Changes to the amount of Child Benefit being claimed
However, you will need to notify HMRC yourself if there are changes to your personal circumstances, such as:
- Starting or ending a relationship
- Getting back together with a previous partner
- A significant change in income
At present, it is expected that you will be able to notify HMRC of these changes using the new service, and your tax code will be updated accordingly. For more complex situations, such as multiple separations and reconciliations within a tax year, you may need to contact HMRC directly for support.
What if You Can't Use the New Service?
If you cannot use the new service, or choose not to, you will still need to follow the traditional process:
- Register for Self Assessment - if you are not already registered, you must do so by 5 October following the end of the tax year.
- Complete a tax return - declare the HICBC on your Self Assessment tax return.
- Pay any tax due - for the 2024/25 tax year, the deadline for paying balancing payments is 31 January 2026. For 2025/26, the deadline is 31 January 2027.
Failure to register, file your return, or pay the charge on time may result in penalties and interest charges from HMRC.
Alternative: Opt Out of Child Benefit
If paying the charge is not worthwhile for your circumstances, you can choose to opt out of receiving Child Benefit altogether. However, even if you opt out of receiving payments, it is still advisable to submit a claim for Child Benefit to protect your entitlement to National Insurance credits, which count towards your State Pension.
You can opt out of payments when you make your claim, or at any time afterwards by contacting the Child Benefit Office.
Important Deadlines
If you meet the eligibility criteria and would like to use the new service to pay your HICBC through PAYE, you must register by:
- 31 January 2026 - to pay your 2024/25 HICBC through the service
- 31 January 2027 - to pay your 2025/26 HICBC through the service
If you miss these deadlines, you will need to register for Self Assessment and complete a tax return instead.
If You've Received a Letter from HMRC
HMRC is currently writing to taxpayers whose records suggest they may be liable for the HICBC. If you receive one of these letters, you should:
- Check whether the charge applies to you using the flowchart provided in the letter
- Decide whether to use the new online service or register for Self Assessment
- Take action before the relevant deadline to avoid penalties
Conclusion
The new HMRC service for paying the High Income Child Benefit Charge represents a significant improvement for employees affected by the charge. For the first time, it is possible to pay the HICBC without the complexity and administrative burden of Self Assessment, provided you have no other reason to complete a tax return.
If you have received a letter from HMRC, or if either you or your partner has an adjusted net income (ANI) exceeding £60,000 and Child Benefit is being claimed for your household, now is the time to take action. The service is straightforward to use, and once set up, it will automatically adjust your tax code to collect the charge throughout the year.
However, the rules around adjusted net income, partner income, and changes in circumstances can be complex. If you are unsure whether you need to pay the charge, how much you owe, or whether you should use the new service, it is worth seeking professional advice.
If you'd like tailored advice on the High Income Child Benefit Charge and how the new service could affect you, contact us today to arrange a free initial consultation. We'll help you understand your obligations and ensure you remain compliant while minimising your administrative burden.
This article provides general information and should not be considered professional advice. It reflects legislation and practices at the time of writing, which may change. Individual circumstances vary, so please consult us before taking any action. We accept no responsibility for financial loss arising from actions taken without our written advice.
Liam O'Riordan
As Principal at Veritas ATS, I help start-ups, owner-managed businesses, and individuals simplify accounting and tax, providing clear, practical solutions tailored to their needs.
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