Taxation (UK) · Income from employment

Child Benefit High Income Tax Charge: How It Is Calculated

Updated 11 October 2026 · Fact-checked

The child benefit income tax charge applies when adjusted net income exceeds £60,000. The charge is 1% of the child benefit received for every £200 of income over £60,000. At £80,000 the charge equals 100% of the benefit. You reduce adjusted net income with Gift Aid and pension contributions to cut the charge.

Understand Child Benefit High Income Tax Charge

Child benefit is a payment made to a person responsible for a child. It is not taxable income, so it never appears in the income tax computation. Instead, a separate tax charge claws it back from higher earners.

The charge applies to a person whose adjusted net income is over £60,000 and who, or whose partner, receives child benefit. Where both partners have adjusted net income over £60,000, the charge falls on the partner with the higher adjusted net income. Where income is between £60,000 and £80,000, the charge is 1% of the child benefit received for every £200 of income over £60,000. Above £80,000 the whole benefit is taxed back.

Adjusted net income is net income less gross Gift Aid donations and gross personal pension contributions paid under relief at source. Net income is total income less reliefs such as trading losses and qualifying interest. Contributions under a net pay arrangement are already deducted in arriving at net income. Adjusted net income is measured before the personal allowance is deducted. It is the same figure used to test the £100,000 personal allowance limit. That is why the same planning idea reduces both problems.

The charge is an income tax liability on top of the normal tax. It is added to the tax payable. It is not a deduction from income and it does not change your bands.

For the exam, the key points are: find net income, then adjusted net income, work out the excess over £60,000, divide by £200 and ignore any part-£200, apply that percentage to the benefit received for the tax year, and then show how planning can reduce the charge.

Key rules to remember

Threshold and range: Charge applies where adjusted net income > £60,000; full clawback at £80,000; The charge is 1% of child benefit received for every £200 of income over £60,000, between £60,000 and £80,000.
Charge percentage: Percentage = (adjusted net income − £60,000) ÷ £200, rounded down to a whole number, as a % of child benefit; Round down to whole £200 steps. For example, £1,999 over the threshold gives 9%, not 10%.
Charge: Charge = child benefit received × percentage; Use the child benefit actually received in the tax year. Cap the percentage at 100%.
Adjusted net income: Adjusted net income = net income − gross Gift Aid donations − gross relief-at-source personal pension contributions; Net income is total income less reliefs such as trading losses and qualifying interest, before the personal allowance. Gift Aid donations and relief-at-source pension payments are grossed up by 100/80 if given as net amounts.
Gross-up of net payments: Gross = net paid × 100 ÷ 80; Basic rate relief is given at source on Gift Aid and on personal pension contributions paid under relief at source.

How to solve Child Benefit High Income Tax Charge questions

Use this order for any child benefit charge question.

1Check who is affected. Confirm the taxpayer or their partner received child benefit in the tax year, and note the amount received. If both partners have adjusted net income over £60,000, the charge falls on the one with the higher adjusted net income.
2Calculate net income for the year: total income from employment, trading, property, savings and dividends, less reliefs such as trading losses and qualifying interest. Do not deduct the personal allowance.
3Deduct gross Gift Aid donations and gross relief-at-source personal pension contributions from net income to reach adjusted net income. Gross up any net payments by 100/80.
4Compare adjusted net income with £60,000. If it is £60,000 or less, there is no charge.
5Work out the excess over £60,000, divide by £200 and round down to a whole number. This is the percentage. If it is 100 or more, the whole benefit is charged.
6Multiply the child benefit received by the percentage. Add the result to the income tax liability as a separate charge.
7If asked about planning, recompute adjusted net income after extra Gift Aid or pension contributions and show the saving in the charge.

Quickest way: Excess over £60,000 ÷ 200 = percentage

When to use it: Use this in objective test questions where you only need the charge, not the full tax computation.

Write adjusted net income and subtract £60,000.
Divide by 200 and drop any decimals. That is the percentage.
If the answer is 100 or more, the charge equals the full child benefit.
Multiply the benefit by the percentage ÷ 100.
Check the wording. If the question gives net Gift Aid or pension payments, gross them up before subtracting.

Common mistakes in Child Benefit High Income Tax Charge

Using taxable income after the personal allowance instead of adjusted net income.
Students take the figure from the bottom of the income tax computation.
Fix: Use net income less gross Gift Aid and gross relief-at-source pension contributions. The personal allowance is not deducted.
Not rounding down the number of £200 steps.
Students divide and keep decimals or round up.
Fix: Only complete £200 steps count. Round the percentage down to a whole number.
Using the net Gift Aid or pension payment to reduce adjusted net income.
The question gives the amount actually paid.
Fix: Gross up by 100/80 before deducting from net income.
Treating the charge as a reduction of income or as taxed at the marginal rate.
Confusion with other reliefs and allowances.
Fix: The charge is a fixed percentage of the child benefit received, added to the tax liability.
Applying the charge at the full benefit amount when income is between £60,000 and £80,000.
Students forget the sliding scale.
Fix: Only at £80,000 and above is the percentage 100%. Always compute the percentage first.
Using the wrong child benefit amount.
Students use a weekly rate or a full year when the benefit was received for only part of it.
Fix: Use the amount received in the tax year as given in the question. Do not invent rates.

Worked examples

Example 1

Priya has net income of £68,500 for the tax year. She makes no Gift Aid donations or pension contributions. She received child benefit of £2,500 in the year. Calculate the child benefit income tax charge.

Show the solution

Adjusted net income = £68,500 as there are no Gift Aid or pension deductions.
Excess over £60,000 = £8,500.
£8,500 ÷ £200 = 42.5, rounded down to 42 whole steps.
Percentage = 42%.
Charge = £2,500 × 42% = £1,050.

Answer: The child benefit income tax charge is £1,050.

Example 2

Tom has net income of £75,000 and received child benefit of £3,000. He pays £8,000 net into a personal pension scheme under relief at source. Calculate the charge before and after the pension contribution.

Show the solution

Before: excess = £75,000 − £60,000 = £15,000.
£15,000 ÷ £200 = 75, so the percentage is 75%.
Charge before = £3,000 × 75% = £2,250.
Gross pension contribution = £8,000 × 100 ÷ 80 = £10,000.
Adjusted net income after = £75,000 − £10,000 = £65,000.
Excess = £5,000; £5,000 ÷ £200 = 25, so the percentage is 25%.
Charge after = £3,000 × 25% = £750.
Saving = £2,250 − £750 = £1,500.

Answer: The charge falls from £2,250 to £750, a saving of £1,500.

Exam tips

Always show adjusted net income as its own line. Marks are given for it even if later steps go wrong.
Look for net payments in the question wording. Gross them up by 100/80 before using them.
In planning questions, state that Gift Aid and pension contributions lower adjusted net income, so they reduce the charge.
Learn the £60,000 to £80,000 range and the 1% per £200 rule. These figures are given in the tax rates and allowances you receive, but you must know how to apply them.
In a written answer, label the charge as an addition to the income tax liability, not a deduction from income.

Practice questions from Income from employment

Child Benefit High Income Tax Charge in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Child Benefit High Income Tax Charge: frequently asked questions

How is the high income child benefit charge calculated?

Find adjusted net income and subtract £60,000. Divide by £200, rounding down, to get a percentage. Apply that percentage to the child benefit received in the tax year.

Can Gift Aid and pension contributions reduce the child benefit charge?

Yes. Both reduce adjusted net income when taken at their gross amount. A lower adjusted net income means a lower percentage, and below £60,000 the charge disappears.

Is child benefit taxable income?

No. It is not included in total income. The tax charge is a separate amount added to the income tax liability of the partner with the higher adjusted net income, provided that income exceeds £60,000.

At what income is the whole child benefit taken back?

At adjusted net income of £80,000 and above, the charge is 100% of the child benefit received. Between £60,000 and £80,000 it rises by 1% for every £200 over £60,000.