Taxation (UK) · The scope of income tax

Child Benefit Income Tax Charge in 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. It is fully clawed back at £80,000.

Understand Child Benefit Income Tax Charge

Child benefit is a payment made to a person who is responsible for a child. It is not taxable income. Nothing is added to the income tax computation for it.

Instead, a separate high income child benefit charge claws back the benefit from higher earners. It is an income tax charge, collected through the self-assessment system. It sits on top of the normal income tax liability.

The charge applies when the taxpayer's adjusted net income is above £60,000. Between £60,000 and £80,000, the charge is 1% of the child benefit received for every £200 of income over £60,000. At £80,000 the charge is 100% of the child benefit, so all of it is repaid.

The charge falls on the person with the higher adjusted net income. This applies where either that person or their partner receives the benefit. Adjusted net income is total income less certain deductions such as gross Gift Aid donations and gross personal pension contributions. So these can reduce or remove the charge.

The thresholds are fixed in the tax rates and allowances ACCA gives you in the exam. You must learn the method. Use the figures given, and check the child benefit amount in the question.

Key rules to remember

Charge band: Charge applies where adjusted net income is between £60,000 and £80,000 (full clawback at £80,000 and above); The charge is based on adjusted net income, not total income.
Charge percentage: Percentage = (Adjusted net income − £60,000) ÷ £200, rounded down to a whole number; The charge is 1% of child benefit for every £200 of income over £60,000. Take only complete £200 steps; round down any part step.
Charge: Charge = child benefit received × percentage; Cap the percentage at 100%. Use the child benefit for the whole tax year, or the part year in which it was received.
Adjusted net income: Adjusted net income = net income − gross Gift Aid donations − gross personal pension contributions paid; Net income is total income less reliefs deducted in arriving at net income. Use the grossed-up amounts for the deductions.

How to solve Child Benefit Income Tax Charge questions

Use this method whenever a question mentions child benefit and income above £60,000.

1Find the child benefit received in the tax year. Add up weekly rates if the question gives them. Use only the weeks in the year that it was received.
2Compute the taxpayer's adjusted net income. Start with net income and deduct gross Gift Aid donations and gross personal pension contributions.
3Check who has the higher adjusted net income. That person is charged, even if their partner receives the benefit.
4If adjusted net income is £60,000 or less, there is no charge. If it is £80,000 or more, the charge equals 100% of the child benefit.
5Between the limits, compute (adjusted net income − £60,000) ÷ £200 and round down to a whole number. That is the percentage.
6Multiply the child benefit by the percentage. Show it as an addition to income tax liability.
7Say how it is collected: the charge is reported on the self-assessment return and paid with the income tax.

Quickest way: Round down, then multiply

When to use it: Use this in Section A or B objective questions where you need only the charge figure.

Subtract £60,000 from adjusted net income.
Divide by 200 and drop any decimal part. This is the percentage.
If the answer is 100 or more, cap it at 100%.
Multiply child benefit by the percentage.
Check that you used adjusted net income, not gross salary.

Common mistakes in Child Benefit Income Tax Charge

Using total income or salary instead of adjusted net income.
The question gives a salary and students apply the £60,000 test straight away.
Fix: First deduct gross Gift Aid and gross pension contributions. Then test the result against £60,000.
Not rounding down the number of £200 steps.
Students compute the percentage as an exact decimal.
Fix: Only complete £200 steps count, so round the percentage down to a whole number.
Adding child benefit to taxable income.
Students assume that all receipts are taxable.
Fix: Child benefit is not income. It is clawed back by a separate charge added to tax payable.
Charging the person who receives the benefit rather than the higher earner.
The wording suggests the recipient is the taxpayer.
Fix: Check both partners. The charge falls on the one with the higher adjusted net income.
Using the net amounts of Gift Aid or pension contributions.
The question gives the net payment and students deduct it directly.
Fix: Gross up the net payment by dividing by 0.80 before deducting it.

Worked examples

Example 1

Mia has adjusted net income of £71,450. Her partner has no income. Mia's family received child benefit of £2,500 in the tax year. Compute the high income child benefit charge.

Show the solution

Adjusted net income is above £60,000 and below £80,000, so a partial charge applies.
Excess over £60,000 = £71,450 − £60,000 = £11,450.
Number of complete £200 steps = 11,450 ÷ 200 = 57.25, rounded down to 57.
Percentage = 57%.
Charge = £2,500 × 57% = £1,425.

Answer: The charge is £1,425, added to Mia's income tax liability.

Example 2

Raj has net income of £78,000. He pays £8,000 (net) into a personal pension and £1,600 (net) to charity under Gift Aid. Raj's wife receives child benefit of £1,800 for the year. Compute Raj's child benefit charge.

Show the solution

Gross the pension contribution: £8,000 ÷ 0.80 = £10,000.
Gross the Gift Aid donation: £1,600 ÷ 0.80 = £2,000.
Adjusted net income = £78,000 − £10,000 − £2,000 = £66,000.
Excess over £60,000 = £6,000.
Number of £200 steps = 6,000 ÷ 200 = 30, so the percentage is 30%.
Charge = £1,800 × 30% = £540.

Answer: The charge is £540. Without the deductions the charge would be 90% of the child benefit, so the reliefs reduce it.

Exam tips

Always show the adjusted net income working. Marks are given for it even if a later step is wrong.
Gross up any Gift Aid or pension payment given as a net amount before you deduct it.
State clearly that the charge is added to income tax liability and is not part of taxable income.
In an objective question, check the child benefit period. Use only the part of the year in which it was received.
In a tax planning question, point out that extra pension or Gift Aid payments can cut or remove the charge.

Practice questions from The scope of income tax

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

At what income does the child benefit charge start?

It starts when adjusted net income is above £60,000. The charge is 1% of the child benefit for every £200 over £60,000. It reaches 100% at £80,000.

Is child benefit taxable income in TX-UK?

No. Child benefit is not included in the income tax computation. The high income charge claws it back through an extra amount of income tax.

Who pays the charge if my partner gets the child benefit?

The person with the higher adjusted net income pays the charge. This is true even if the partner is the one who receives the benefit.

Can I reduce the charge?

Yes. Gross Gift Aid donations and gross personal pension contributions reduce adjusted net income. A lower adjusted net income can reduce the charge, or remove it if income falls to £60,000 or below.