2024 Child Benefit Tax Update Explained

There was good news in the spring Budget for families that claim Child Benefit payments, as well as families that had previously fallen just outside of being eligible. These changes came into effect from 6th April 2024, and impacted half a million families, according to government figures.

Child Benefit is paid monthly (or weekly if you’re a single parent or in receipt of other benefits, such as Universal Credit) to anyone with parental responsibility for children under the age of 16, or up to 20 years old if that young person is in full-time education.

Who is eligible for child benefit and how much is it worth?

As of 6th April 2024, Child Benefit rose to £25.60 per week (£102.40 every four weeks) for the eldest or only child, up from £24 per week. If you have other children, you can claim £16.95 per week (£67.80 every four weeks), up from £15.90 per week.

Child Benefit is paid into a nominated bank account, but only one parent can claim for a child. This means that a couple with two children would be able to claim a maximum of £32.55 per week, although both parents can claim for one child each if they want the money paid into separate bank accounts.

Let’s take a look at an example.

Stephen and Sarah have two children: a 10-year-old son and a 5-year-old daughter.

Sarah claims £25.60 per week for their son, which is paid into her bank account every four weeks.

Stephen claims £16.95 per week for their daughter, which is paid into his bank account every four weeks.

Stephen and Sarah could also choose to have the money paid into a joint bank account, with one of them making claims for both children.

Unsure of how much Child Benefit you’re entitled to? You can use the government’s Child Benefit Tax Calculator.

Explaining the High Income Child Benefit Charge (HICBC)

The High Income Child Benefit Charge (HICBC) was introduced in 2013.

HICBC is a tax charge that applies to anyone with an income over a specified amount who receives Child Benefit, or whose partner receives it.

The HICBC increases the more you earn above the specified threshold, while there is also a threshold where the HICBC is equal to the maximum eligible Child Benefit, i.e. it is taxed at 100%.

How is HICBC changing?

In the spring Budget, the Chancellor announced that the amount you can earn before you start to lose Child Benefit would be increased.

From 6th April, you will only have child benefit taken away entirely if one parent earns more than £80,000 per year—up from £60,000 per year.

The amount of money you can earn before Child Benefit is reduced has also been increased—up to £60,0000 from £50,000. This means that a family where both parents earn up to £60,000 can now claim the full amount of Child Benefit.

How to apply for Child Benefit

You can begin to claim Child Benefit 48 hours after a birth has been registered, or as soon as a child comes to live with you. However, note that you don’t have to claim straight away to receive Child Benefit for that period, as payments can be backdated by up to three months.

You can claim online, by phone or by post, but you’ll need the following documents to do so:

• your child’s birth or adoption certificate
• your bank or building society details
• your National Insurance number
• your partner’s National Insurance number, if you have one

At Warr & Co we’ve been helping families maximise their tax efficiency for many years, including with self-assessment and tax planning, as well as planning their monthly budget.

To find out more about how we can help your family, feel free to get in touch with our friendly and experienced team today, or book your free, no obligation consultation