Skip to main content
Yolist
Yolist

Child Benefit Tax Trap Calculator 2024/25

Calculate the High Income Child Benefit Charge (HICBC) for 2024/25. From April 2024 the taper starts at £60,000 (raised from £50,000) and reaches 100% clawback at £80,000.

High Income Child Benefit Charge (HICBC)

Based on 2024/25 rates. Adjusted net income = salary + benefits − pension contributions − Gift Aid (grossed up).

Child Benefit is paid for every child you are responsible for

Salary + benefits − pension contributions − Gift Aid grossed-up. Check your P60 or self assessment return.

Some families have opted out — you can re-register if your income has fallen below £60,000

Annual Child Benefit (all children)£2,212.60
Weekly Child Benefit£42.55
HICBC (tax charge)£1,106.30
Net Child Benefit (after charge)£1,106.30

You are in the Child Benefit tax trap zone

Effective marginal rate on income in this range: 53.1%Income tax (40%) + NI (2%) + HICBC clawback (11.1%)

A pension contribution of £10,000.00 could reduce your adjusted net income to £60,000 and eliminate the charge entirely — saving you £1,106.30 in HICBC.

Child Benefit: £25.6/week eldest + £16.95/week each additional child (2024/25)

5 Child Benefit Tax Trap Planning Tips

  1. Threshold raised to £60k from April 2024: If you opted out when the threshold was £50,000, consider re-registering at gov.uk/child-benefit — you may now be entitled with no charge.
  2. Pension contributions reduce adjusted net income: Every £1 contributed to a pension reduces your ANI by £1. In the trap zone, this can be worth up to 62p of tax saving per £1 contributed.
  3. Salary sacrifice pension is most effective: Unlike relief-at-source, salary sacrifice reduces gross salary before NI, saving both income tax and NI. This makes it more valuable than personal pension contributions.
  4. The two-child limit applies to Universal Credit — not Child Benefit: Child Benefit has no two-child limit. However, Universal Credit and Child Tax Credit are limited to two children for those born after 6 April 2017.
  5. HICBC must be reported via Self Assessment:Even if you don't normally file a tax return, you must register for Self Assessment and declare the HICBC if your income exceeds £60,000 and you receive Child Benefit. Penalties apply for failure to do so.

How the Child Benefit Tax Trap Works

Child Benefit is paid to the person responsible for the child. However, if either partner in a household has an adjusted net income (ANI) above £60,000, a tax charge claws back 1% of Child Benefit for every £200 of ANI above that threshold. The charge reaches 100% at £80,000.

April 2024 Changes

The threshold was raised from £50,000 to £60,000 and the full clawback point moved from £60,000 to £80,000. Families who opted out of Child Benefit when income exceeded £50,000 should consider re-registering.

Effective Marginal Rate in the Trap Zone

Between £60,000 and £80,000, the effective marginal rate can reach 62%: Income tax (40%) + NI (2%) + HICBC (up to 20%) = 62%. Pension contributions made via salary sacrifice reduce both income tax and NI — making them extremely tax-efficient in this zone.