Simplification of High Income Child Benefit Charge payment is welcome as more parents come into scope of the charge

The Association of Taxation Technicians (ATT) welcomes today’s announcement that the Government plans to make it easier to pay the High Income Child Benefit Charge as frozen thresholds, together with wages rising with inflation, drag more taxpayers with children into the charge.
Amid a raft of draft legislation published today1 came an announcement that the Government plans to simplify how people liable for the High Income Child Benefit Charge (HICBC) will pay the charge in future.


The HICBC is payable where a household receives Child Benefit and at least one person in the household with parental responsibility has taxable income in excess of £50,000. Regardless of who in the household receives Child Benefit, the HICBC is payable by the household’s higher-earner, who may have to pay back some or all of the Child Benefit received during each tax year2.


Jon Stride, Vice Chair of ATT’s Technical Steering Group, said:


“The HICBC has been a cause of confusion for taxpayers since it was introduced in 2013.


“Under current rules, where the higher earner in a household is affected by the HICBC, they have to register for Self Assessment and submit tax returns every year in order to pay the charge. People with otherwise simple straightforward tax affairs can be unaware that they need to file tax returns because of the HICBC.


“Today’s announcement that the Government wants to simplify the HICBC payment and compliance process is extremely welcome. Details of the proposed changes are still to be confirmed, but those potentially affected by the HICBC may not have to file a tax return in future unless they need to be in Self Assessment for other reasons.


“The current HICBC compliance system creates unnecessary administration for taxpayers and HMRC alike. We look forward to receiving further details of the proposed changes and urge the Government not to delay in issuing draft legislation to enact the change for consultation. At a time when HMRC are struggling to cope with demand, a simplification and reduction in the number of tax returns required would be a blessing for all concerned.”