Spring Statement announces payroll option for paying the high-income child benefit charge

Families who owe the high income child benefit charge (HICBC) will be able to pay it through their tax code and company payroll rather than filing a Self Assessment return, under changes announced in the Spring Statement and reported by Which? on 18 April 2025¹. The new digital service is due to come into effect in summer 2025, and HMRC will contact affected families when it launches¹.

The high income child benefit charge is a tax on child benefit that applies if a claimant or their partner earns more than £60,000¹. Under the rules in place at the time of the report, paying the charge required filing a Self Assessment tax return¹. Where a claimant or their partner earns over £80,000, the full benefit entitlement must be repaid through HICBC¹. Once registered with HMRC, parents will be able to choose to have the charge collected through their company payroll, so they will no longer need to file a return to report child benefit¹.

Child benefit rose on 6 April 2025 to £26.05 a week (£1,355 a year) for the eldest or only child and £17.25 a week (£897 a year) for each additional child¹. Those figures are a 1.7% increase on the £1,331 a year for the eldest child and £881 a year for each additional child paid in 2024-25¹. The annual uplift is linked to the rate of inflation in September of the previous year; the 2025-26 increase is based on September 2024, when the Consumer Price Index fell to 1.7%¹. Inflation had since risen to 2.6% at the time of the report¹.

The number of families claiming child benefit has fallen to its lowest level since 2003, according to HMRC figures cited in the report, with a steady decline in families claiming and receiving payments since the charge was introduced in 2013¹. Claimants who fail to report child benefit and pay the charge can face a penalty and interest on what they owe from the day payment was due, and late payment interest on taxes stood at 8.5%¹.

Why it matters for households

The payroll route changes how the charge is paid, not who owes it. Families where one partner earns above £60,000 remain liable, and those above £80,000 still repay the full benefit entitlement¹. What changes from summer 2025 is the administration: instead of a Self Assessment return, the charge can be collected through the tax code and payroll once a parent registers with HMRC¹. Until the service launches, the existing reporting duty and the penalty and interest rules continue to apply to anyone who does not report the benefit and pay what is owed¹.

Claiming child benefit also carries National Insurance credits, which count towards state pension entitlement for people who are not working, and can be transferred to a partner who is in work¹. The report puts the value of the credits at up to £921 a year, the same as the current cost of buying voluntary contributions at £17.75 a week, and notes this applies even where a family chooses not to receive payments¹.

What happens next

The changes come into effect in summer 2025, and HMRC will contact affected families when the new digital service launches¹. No specific launch date has been reported.