The High Income Child Benefit Charge

We have seen a couple of instances where clients have received a letter from HMRC saying that the submitted tax return may be wrong because the High Income Child Benefit Charge (HICBC) has not been reported on the tax return.

The HICBC is payable by the party in a couple living together who has gross taxable income of more than £50,100 and more than their partner. It is only payable where the couple are still receiving the child benefit in respect of a child or children, usually under the age of 18.

In the cases we have seen, the tax return was correct. Yes the HICBC was not shown on our client’s return but this was because it was reported on the partner’s tax return.

It is extremely disappointing to say the least that HMRC’s systems seem able to identify correctly clients whose income is more than £50,100 but unable to cross-match to the partner’s return to check that the HICBC has been reported correctly there.

This is an example of how the HICBC was ill-thought out and implemented without consultation – many in the tax world think it is actually unworkable.

If you are concerned about the HICBC and whether iot applies to you or your partner, do contact us.