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HMRC new Child Benefit change for parents earning over £60k

Child Benefit
Two-child benefit cap
Family
Personal Finance

Jade Wright Profile Image
By Jade Wright Personal Finance Writer
HMRC makes Child Benefit has made a change for anyone who earns over £60,000 <i>(Image: Getty Images)</i>
HMRC makes Child Benefit has made a change for anyone who earns over £60,000 (Image: Getty Images)
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HMRC changes to Child Benefit mean that parents who earn between £60,000 and £80,000 a year can now have their high-income child benefit charge paid through their payroll under PAYE.

Under the old rules, they needed to file a self-assessment tax return to pay the charge, but it's now a simple payroll deduction.

Once registered with HMRC, parents should be able to choose to have their HICBC collected through their monthly pay packet, meaning they’ll no longer need to file a return for that purpose.

James Murray MP, Exchequer Secretary to the Treasury, says: "We are going further and faster to make HMRC fit for the 21st century, including delivering a simpler and easier system for all PAYE workers.

"By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share."

The high-income child benefit charge only applies if you or your partner earn more than £60,000. 

Parents with an income of up to £80,000 can still receive some Child Benefit, but must repay a portion, and that's where the new PAYE option comes in.

How much is Child Benefit?

From April 7 2025, parents receive £26.05 a week (£1,355 a year) for their eldest or only child and £17.25 a week (£897 a year) for each additional child.

These figures are a 1.7% increase on the £1,331 a year for the eldest child and £881 a year for each additional child paid in 2024-25

If you choose to opt out of getting Child Benefit payments, you should still fill in the Child Benefit claim form. You need to state on the form that you do not want to get payments.

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Is there a two-child cap on Child Benefit?

No, and this is the cause of a great deal of confusion, as Martin Lewis has explained on his website Money Saving Expert .

"Child Benefit is a universal payment made for every child you have," he says. "It should accurately be called the 'two-child limit for Universal Credit or Tax Credits'.

"This one applies to the benefits that people who have low incomes, whether they're working or not working, get. That's what this is about.

"And in simple terms, it means if you have more than two children, then you won't get any additional benefit for the costs that they are incurring you (on Universal Credit and Tax Credits)."

HMRC tax-free childcare

HMRC is also reminding parents to apply for tax-free childcare.

This sees parents given up to £2,000 a year - split up into £500 each quarter - for each of their children to help with the costs of childcare. This goes up to £1,000 every three months if a child is disabled (or up to £4,000 a year in total).

To get tax-free childcare, parents just need to set up an online childcare account for each child. For every £8 they pay into this account, the government will pay in £2 to use to pay a nursery or childminder.

Your child must be 11 or under and usually live with you. They stop being eligible on September 1 after their 11th birthday. Adopted children are eligible, but foster children are not.

HMRC says you can use it to pay for childminders, nurseries and nannies, plus after school clubs and play schemes.

Your childcare provider must be signed up to the scheme before you can pay them and benefit from tax-free childcare.

Child Benefit
Two-child benefit cap
Family
Personal Finance

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