High-Income Child Benefit Charge (HICBC) and PAYE Update – April 2024 Changes

From 6 April 2024, major changes took effect to both the High-Income Child Benefit Charge (HICBC) and PAYE Real-Time Information (RTI) reporting for salary advances.

These updates bring meaningful relief for families affected by the HICBC and reduce administrative burdens for employers managing payroll under RTI. Here’s a breakdown of what changed and how it may affect you.

1. High-Income Child Benefit Charge (HICBC) – Key Changes

The HICBC effectively claws back Child Benefit through the tax system where one member of a household earns above a certain income threshold.

Under the new 2024/25 rules, the government introduced significant increases to both the threshold and the taper rate.

New HICBC Rules from 6 April 2024

• The income threshold at which the charge begins rose from £50,000 to £60,000.

• The clawback rate was halved — now 1% for every £200 of income above £60,000 (previously 1% per £100).

• As a result, 100% of the Child Benefit is only fully clawed back once income reaches £80,000 — compared with £60,000 under the previous rules.

These changes substantially reduce the number of families affected and increase disposable income for many middle-income households.

Example: Cheryl and Frank

Frank is a househusband, and his wife Cheryl earns £65,000 a year. She claims Child Benefit for their four children.

Child Benefit Rates per Week

Child Benefit Claimed

• 2023/24:
  (£24.00 × 52) + (3 × £15.90 × 52) = £3,728
• 2024/25:
  (£25.60 × 52) + (3 × £16.95 × 52) = £3,975

HICBC Impact

• 2023/24:
  Cheryl’s income exceeded £60,000 under the old system, meaning her entire Child Benefit was clawed back through the HICBC.
  Net benefit: £0
• 2024/25:
  With income of £65,000, Cheryl’s charge is now only 25% of the £3,975 Child Benefit — i.e. £993.75.
  Her household therefore keeps 75% of the benefit, receiving £2,981.25.

Result: A direct increase in net household income due to the new thresholds.

Reinstating Child Benefit Payments

Families who previously opted out of Child Benefit (to avoid HICBC) may now wish to reclaim their entitlement. To reinstate payments:

You can either:

• Submit a request online through your Government Gateway account; or
• Contact the Child Benefit Office directly.

Once HMRC receives your request, it can take up to 21 days for the first payment to be processed.
Payments can normally be backdated for up to three months, and HMRC will confirm any arrears due.

Important: If you reinstate Child Benefit, you may need to file a Self Assessment tax return to declare any HICBC due.

From 6 April 2026, the government plans to base the HICBC on household income rather than just the higher earner’s income — a major reform designed to make the system fairer for single-earner families.

2. PAYE Reporting Changes – Salary Advances

A second update took effect from 6 April 2024, simplifying PAYE Real-Time Information (RTI) reporting for salary advances.

Previous Rule

Under RTI, employers were required to report each payment “on or before” the date the employee received it.
This created unnecessary admin when an employee received part of their pay early — employers had to file two separate RTI submissions (one for the advance, one for the regular pay).

New Rule (from April 2024)

Employers can now report salary advances on or before the employee’s contractual pay date, rather than the date of the advance.

This means:

• Only one RTI submission is required per pay period, even if part of the salary is paid early.
• It applies only to advances of pay already earned at the time of the payment.

This change simplifies payroll processing, reduces errors, and cuts administrative time for HR and finance teams.

Practical Advice

• For families: Review your Child Benefit position — many who previously opted out will now benefit from reinstating payments.
• For employers: Update payroll procedures to take advantage of the new RTI rule for advances and avoid duplicate submissions.

If you’re unsure about your HICBC exposure or need support updating PAYE systems, our team at Merranti Accounting can help assess your situation and ensure full compliance.