Child Benefit is a support payment provided by HM Revenue and Customs, or HMRC, to parents and guardians across the UK to help with the costs of raising children.
While the underlying benefit rates adjust slightly each year, it is the rules surrounding the High Income Child Benefit Charge, or HICBC, that have seen the most significant changes.
October 2025 marks the implementation of a major change to how the HICBC can be paid by employed people, a development aimed at simplifying tax affairs for thousands of families.
This new option allows those affected by the charge to deal with it through their regular payroll, avoiding the need for a separate tax return purely for this purpose.
The High Income Child Benefit Charge applies when one parent or guardian in a household has an adjusted net income of over £60,000.
Under the old system, this charge was solely administered through the Self Assessment tax return process, which added complexity and an administrative burden for many employed individuals who did not otherwise need to file a tax return.
The new system coming into effect in October 2025 is designed to integrate the payment of this charge directly into the Pay As You Earn, or PAYE, system, offering a more streamlined way for high earning families to comply with the rules.
What is the most important change to the High Income Child Benefit Charge in October 2025?
The most important change is the introduction of a new option for employed individuals to pay the High Income Child Benefit Charge through the Pay As You Earn, or PAYE, system.
This means that instead of having to register for Self Assessment and complete an annual tax return solely to pay the HICBC, a parent can now ask HMRC to adjust their tax code.
The HICBC amount will then be deducted automatically from their salary or pension income on a monthly basis, making the process much simpler and more integrated with standard employment processes.
Will the eligibility income threshold for the HICBC change in 2025?
No, the income threshold at which the charge begins to apply will not change in October 2025.
The threshold was increased significantly in April 2024 from £50,000 to £60,000, and this figure remains in place.
Furthermore, the rate at which the charge is applied, which is often called the taper, also remains the same.
The charge is calculated at a rate of one per cent of the total Child Benefit received for every £200 of adjusted net income over £60,000.
This means the benefit is not fully withdrawn until the highest earner’s income reaches £80,000.
If I am self employed, can I use the new PAYE system to pay the charge?
No, the new system for paying the High Income Child Benefit Charge through a tax code adjustment is only available to individuals who pay tax through the Pay As You Earn, or PAYE, system, meaning they are employed or receive a pension.
If you are self-employed, or if you need to complete a tax return for any other reason, such as to report income from property or dividends, you will still need to pay the charge through the existing Self Assessment tax return process.
The new PAYE option only benefits those whose only reason for filing a tax return was to handle the HICBC.
What should I do if I previously opted out of receiving Child Benefit payments?
Many high earning families previously chose to opt out of receiving the Child Benefit payments altogether to avoid the complexity and administrative burden of filing a Self Assessment tax return.
With the new, simplified PAYE option available from October 2025, those families should seriously consider restarting their claim.
You can opt back in to receive the payments, and then elect for the charge to be paid via your tax code.
Even if your earnings mean the entire payment is clawed back, claiming the benefit ensures you receive National Insurance credits, which count towards your State Pension entitlement.
What are the steps to request payment through the PAYE system?
To pay the High Income Child Benefit Charge through the PAYE system, you will need to contact HMRC directly after the new digital service opens.
You should not assume this will happen automatically.
The process will involve:
- Calling or using the HMRC online service to inform them you want the charge collected through your tax code.
- If you currently file a Self Assessment tax return only to pay the HICBC, you can request to be removed from the Self Assessment system.
- HMRC will then adjust your tax code to reflect the HICBC you are liable to pay for the current tax year.
It is important to ensure you have made an active claim for Child Benefit, even if you do not want to receive the payments into your bank account.
How do National Insurance credits relate to the new HICBC process?
Child Benefit provides essential National Insurance credits to the claiming parent for each week they receive the benefit, and these credits contribute towards their State Pension entitlement.
This is a major factor for a non-working or lower earning parent in a high income household.
Even if the household must repay the entire Child Benefit payment through the HICBC, the main claimant still receives the National Insurance credits.
The new PAYE collection method does not change the fact that claiming the benefit, even if it is immediately repaid through tax, protects the claimant’s future State Pension.
Are there any other Child Benefit changes expected for 2025 that I should know about?
While the PAYE option for the High Income Child Benefit Charge is the main change implemented in October 2025, it is important to be aware of other potential developments.
Child Benefit rates typically increase each April, and the government has signalled its intention to reform the basis of the HICBC, possibly to a household income basis, although this was later paused.
Furthermore, there have been some temporary issues with HMRC checks on families’ residency, though the agency is taking steps to correct these.
Always check the official government website for the latest updates on benefit rates and rules.
