​Child Benefit provides essential financial support to families in the UK, assisting with the costs of raising children. For the tax year 2024-2025, there have been significant updates to the Child Benefit rates and the High Income Child Benefit Charge (HICBC) thresholds. Understanding these changes is crucial for effective financial planning and compliance.

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Updated Child Benefit Rates for 2024-2025

Effective from 6 April 2024, the weekly Child Benefit rates are as follows:

• Eldest or only child: £25.60 per week​

• Each additional child: £16.95 per week​

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This adjustment means that families with one child will receive up to £1,331 annually, reflecting an increase of £83.20 from the previous year. For each additional child, the annual amount is £881, an increase of £54.60.

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High Income Child Benefit Charge (HICBC) Threshold Changes

The HICBC is a tax charge that affects individuals with higher incomes who receive Child Benefit. As of 6 April 2024, the thresholds have been updated:

• Income between £60,000 and £80,000: The tax charge is tapered, increasing gradually. Specifically, the charge equals 1% of the Child Benefit received for every £200 of income over £60,000.

• Income over £80,000: The tax charge equals the total amount of Child Benefit received, effectively nullifying the benefit.​

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Implications for Families

Families should assess their adjusted net income to determine if they are liable for the HICBC. Adjusted net income includes total taxable income before any allowances, minus certain tax reliefs such as Gift Aid donations and pension contributions. If your income falls within the HICBC thresholds, you have two options:​

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1. Continue Receiving Child Benefit: Receive the payments and pay any applicable HICBC at the end of the tax year through Self Assessment.​

2. Opt-Out of Payments: Choose not to receive Child Benefit payments, thereby avoiding the tax charge. However, it's advisable to still complete the Child Benefit claim form to ensure you receive National Insurance credits, which contribute towards your State Pension.

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Government Calculator for HICBC

To assist in calculating potential HICBC liabilities, HM Revenue and Customs (HMRC) provides an online Child Benefit tax calculator. This tool estimates:​

• The amount of Child Benefit you’re entitled to in a tax year.​

• Any HICBC you or your partner may need to pay.​

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Access the calculator here: ​GOV.UK

 

Key Considerations

• Claiming Child Benefit: Even if you choose to opt-out of receiving payments to avoid the HICBC, submitting a claim ensures you receive National Insurance credits and secures a National Insurance number for your child without additional application.

• Payment Schedule: Child Benefit is typically paid every four weeks on a Monday or Tuesday. Single parents and those receiving certain benefits may request weekly payments.

• Changes in Circumstances: Report any changes in your or your partner's income, relationship status, or family situation to HMRC promptly to ensure accurate benefit payments and tax charges.​

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Staying informed about these updates enables families to manage their finances effectively and comply with current regulations.