Taxation (UK) · The comprehensive computation of taxable income and income tax liability

Child Benefit Income Tax Charge Calculation for ACCA TX-UK

Updated 11 October 2026 · Fact-checked

The high income child benefit charge is an income tax charge on a taxpayer whose adjusted net income is over £60,000 and who, or whose partner, receives child benefit. The charge is 1% of the child benefit received for every £200 of income over £60,000. At £80,000 the charge is 100%.

Understand Child Benefit Income Tax Charge

Child benefit is a payment made to parents for each child. It is not taxable income. It is not in your income tax computation as income. Instead, a separate charge claws it back from higher earners.

The charge applies where your adjusted net income is above £60,000. It is based on child benefit received for the tax year, by you or your partner. If both partners have income over £60,000, the charge falls on the one with the higher adjusted net income. In exam questions, the person with the charge is usually the taxpayer in the question.

The charge grows in steps. For every full £200 of income over £60,000, the charge is 1% of the child benefit received. Income between £60,000 and £80,000 is the range in which the charge builds up. At £80,000 or more, the charge equals 100% of the child benefit, so the benefit is fully clawed back.

The charge is added to the taxpayer's income tax liability. It is not a deduction from income. Your income tax on taxable income is worked out in the usual way, and the child benefit charge is then added to it.

Adjusted net income is net income (total income less certain deductions such as trading losses and payments made gross) less the grossed-up amount of Gift Aid donations and personal pension contributions paid net. This means Gift Aid and pension payments can reduce the charge, which is why this topic links to tax planning.

Key rules to remember

Charge percentage: Charge % = (Adjusted net income − £60,000) ÷ £200, rounded down to a whole number, as a % of child benefit; Each full £200 of income above £60,000 adds 1%. Ignore any part of £200. The percentage cannot exceed 100%.
Child benefit charge: Charge = child benefit received × charge %; Use the child benefit received in the tax year. The charge applies only where income is between £60,000 and £80,000 for the percentage to be below 100%.
Full clawback: Adjusted net income of £80,000 or more → charge = 100% of child benefit; This follows from 20,000 ÷ 200 = 100 steps of 1%.
Adjusted net income: Adjusted net income = net income − grossed-up Gift Aid donations − grossed-up personal pension contributions paid net; Gross up net payments by multiplying by 100 ÷ 80. This is the income measure used for the charge.

How to solve Child Benefit Income Tax Charge questions

Use the same short method for any child benefit charge question. Work in order and show each figure.

1Check who receives the child benefit and which person has the higher adjusted net income. The charge falls on that person.
2Work out net income, then adjusted net income. Deduct grossed-up Gift Aid and grossed-up personal pension contributions paid net.
3If adjusted net income is £60,000 or less, there is no charge. If it is £80,000 or more, the charge is 100% of the child benefit.
4Otherwise, deduct £60,000 and divide by £200. Round down to a whole number. This is the percentage.
5Multiply the child benefit received in the tax year by that percentage.
6Add the charge to the income tax liability. Do not deduct it from income or tax allowances.
7If the question asks about tax planning, recompute with the extra Gift Aid or pension contribution and compare the charge.

Quickest way: Divide by 200 and round down

When to use it: Use this when the adjusted net income is already given in the question, as in many objective test questions.

Subtract £60,000 from adjusted net income.
Divide the result by 200 and drop any decimals. That number is the charge as a %.
Multiply by child benefit received and divide by 100.
Sense-check: the answer must be less than the child benefit unless income is £80,000 or more.

Common mistakes in Child Benefit Income Tax Charge

Using total income or taxable income instead of adjusted net income.
Students see an income figure and use it straight away.
Fix: Always check for Gift Aid and pension contributions paid net. Gross them up and deduct them before measuring against £60,000.
Rounding up the number of £200 steps, or using the part-step.
Students treat the charge as a smooth sliding scale.
Fix: Only full £200 steps count. £5,399 over £60,000 gives 26 steps, so 26%, not 27%.
Treating child benefit as taxable income in the computation.
The charge sounds like tax on child benefit received as income.
Fix: Child benefit is not income. Keep it out of the computation and add the charge to the tax liability.
Forgetting to cap the charge at 100% of child benefit.
Students apply the formula mechanically to very high incomes.
Fix: At £80,000 or more the charge equals the whole child benefit. Check for this first.
Using the wrong child benefit amount, such as a figure for part of the year or the wrong period.
Children may be born during the year or benefit may start or stop part-way through.
Fix: Use the child benefit actually received in the tax year, as given in the question.
Charging the wrong partner.
Students assume the recipient always pays.
Fix: The charge falls on the partner with the higher adjusted net income if that exceeds £60,000, even if the other partner receives the benefit.

Worked examples

Example 1

Harriet receives child benefit of £2,500 in the tax year. Her adjusted net income is £68,450. Her partner has adjusted net income of £25,000. Calculate Harriet's child benefit income tax charge.

Show the solution

Harriet has the higher adjusted net income, and it is above £60,000, so the charge applies to her.
Income above the threshold: £68,450 − £60,000 = £8,450.
Number of full £200 steps: 8,450 ÷ 200 = 42.25, so 42 full steps.
Charge percentage = 42%.
Charge = £2,500 × 42% = £1,050.

Answer: The child benefit income tax charge is £1,050, added to Harriet's income tax liability.

Example 2

Dev has net income of £72,000. He paid £4,000 (net) to his personal pension scheme and made a Gift Aid donation of £1,600 (net) in the tax year. His partner receives child benefit of £3,000. Calculate Dev's child benefit charge.

Show the solution

Gross up the pension contribution: £4,000 × 100/80 = £5,000.
Gross up the Gift Aid donation: £1,600 × 100/80 = £2,000.
Adjusted net income = £72,000 − £5,000 − £2,000 = £65,000.
Income above £60,000 = £5,000.
Number of full £200 steps: 5,000 ÷ 200 = 25.
Charge percentage = 25%.
Charge = £3,000 × 25% = £750.

Answer: Dev's child benefit income tax charge is £750. His partner's income is assumed lower than his, so the charge falls on Dev.

Exam tips

Look for Gift Aid and pension payments in the question. They are often the trap that changes adjusted net income.
Write the number of £200 steps as a separate line so you pick up method marks even if arithmetic slips.
In objective test questions, check whether the answer would be 100% of the benefit or nil before calculating. It saves time.
In written planning answers, say that extra Gift Aid or pension contributions reduce adjusted net income and so reduce the charge, and quote the figure saved.

Practice questions from The comprehensive computation of taxable income and income tax liability

Child Benefit 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 Income Tax Charge: frequently asked questions

What is the child benefit income tax charge in ACCA TX-UK?

It is an income tax charge on a taxpayer with adjusted net income over £60,000 when they or their partner receive child benefit. The charge is 1% of the child benefit for every £200 of income over £60,000. It is added to the income tax liability.

At what income is child benefit fully taken back?

At adjusted net income of £80,000 or more, the charge is 100% of the child benefit received. This is because £20,000 above the threshold gives 100 steps of £200, each adding 1%.

Do I round the number of £200 steps up or down?

You round down. Only complete £200 steps of income above £60,000 count. For example, £8,450 above the threshold gives 42 steps, not 43.

Is child benefit included in taxable income?

No. Child benefit is not part of the income tax computation. The high income charge is a separate amount added to the income tax liability.