If you owe the High Income Child Benefit Charge, you can repay it through your PAYE tax code instead of writing HMRC a cheque. There are two ways in: a direct PAYE service for people who don’t otherwise file a tax return, and a “coding out” option for people who do. Each has its own conditions and, more importantly, its own deadline.
Route One: Direct PAYE if You Don’t File a Tax Return
From the 2024-25 tax year onwards, HMRC lets you pay the charge through your tax code without registering for self assessment at all. You qualify only if you don’t already need to send a return for another reason, such as self-employment or significant investment income. The request has to reach HMRC on or before 31 January in the year after the tax year you’re paying for.1GOV.UK. High Income Child Benefit Charge: Pay the Tax Charge Through PAYE
Once you’re registered, HMRC adjusts your tax code and sends the details to you and your employer. The charge is then spread across your pay for the following tax year. You don’t need to do anything further each year unless your circumstances change. If you’re a straightforward PAYE employee with no other filing obligations, this is the simpler route and worth trying first.
Route Two: Coding Out a Self Assessment Bill
If you already file self assessment, or you don’t qualify for the direct PAYE service, you can still have the charge collected through your tax code by asking HMRC to “code out” the debt on your return. All three of these conditions must be met:
- Your total self assessment bill for the year is less than £3,000. You can’t make a partial payment to bring the balance under this threshold.
- You already pay tax through PAYE, whether from employment or a company pension.
- Your online tax return reaches HMRC by 30 December, or a paper return by 31 October.2GOV.UK. Pay Your Self Assessment Tax Bill: Through Your Tax Code
The 30 December date is the one that catches people out. File on 2 January and you’ve met the 31 January filing deadline but missed the coding-out window. At that point your only option is to pay the full amount by 31 January.3GOV.UK. Self Assessment Tax Returns: Deadlines
The £3,000 ceiling is generous relative to the charge itself. For a family with two children, the maximum HICBC works out to roughly £2,338 a year at current rates, well inside the limit. But if your return includes other tax owed on top, the total can push past £3,000 and knock you out of coding out entirely.
What Happens After Your Tax Code Changes
Whichever route you use, HMRC issues a new tax code and notifies both you and your employer or pension provider. Payroll updates the code, and the repayment comes off in equal monthly deductions across the tax year.1GOV.UK. High Income Child Benefit Charge: Pay the Tax Charge Through PAYE You don’t send a separate payment or transfer money yourself.
The revised code usually carries a “K” prefix or shows a reduced personal allowance, reflecting the extra tax being collected. You can check the current code any time through your HMRC personal tax account. If your income changes noticeably during the year, contact HMRC so the code can be updated and the deductions stay accurate.
Don’t Cancel the Claim to Avoid Paying
If your household is losing the whole benefit to the charge anyway, it’s tempting to stop the claim and be done with it. That’s a mistake when the person at home caring for children isn’t working. Claiming child benefit automatically generates National Insurance credits that count toward State Pension qualifying years.4GOV.UK. National Insurance Credits Drop the claim and you can end up with gaps that are expensive to fill later.
The workaround is to submit a claim but tick the box opting out of receiving the actual payments. The claimant keeps the NI credits, no money changes hands, and there’s nothing for HMRC to charge back through your tax code. That’s the right move for any household where the charge would wipe out the benefit in full.
A Quick Refresher on What You’re Repaying
The High Income Child Benefit Charge kicks in when the higher earner in a household has an adjusted net income above £60,000. The charge is 1% of the child benefit received for every £200 of income over that threshold.5GOV.UK. High Income Child Benefit Charge: Overview Once income hits £80,000, the charge equals the full child benefit for the year, cancelling it out. The £60,000 starting point took effect from the 2024-25 tax year.6GOV.UK. The High Income Child Benefit Charge Threshold
The charge is assessed on the individual with the higher income, not the household total, and it doesn’t matter which partner actually receives the benefit payments. For 2026-27, child benefit is £27.05 per week for the eldest or only child and £17.90 per week for each additional child,7GOV.UK. Child Benefit, Guardian’s Allowance and Tax Credits – Rates and Allowances which comes to about £1,407 a year for one child or £2,338 for two. HMRC’s online child benefit tax calculator will give you a quick estimate before you decide how to pay.
If You Ignore the Charge
The charge doesn’t disappear if you don’t report it. If you need to file self assessment because of the HICBC and miss the 31 January deadline, penalties stack up fast: an immediate £100 fixed penalty, £10 a day for up to 90 days after three months, and 5% of the tax due (or £300 if greater) at six months and again at twelve.8GOV.UK. Self Assessment Tax Returns: Penalties
There’s also a separate penalty for failing to notify HMRC you’re liable in the first place. For a non-deliberate failure where HMRC has to prompt you, it can reach 30% of the unpaid tax; coming forward voluntarily before HMRC gets in touch usually brings that figure down sharply.9GOV.UK. Compliance Checks – Penalties for Failure to Notify – CC/FS11 The charge itself can be backdated across multiple years, with interest, if you’ve been over the threshold for a while without reporting.