Around 100,000 PAYE employees have been contacted by HMRC about a new way to pay Child Benefit charge through PAYE rather than filing a Self Assessment return. The shift ends a long-standing source of complaint for higher-earning parents, and could affect hundreds of thousands more families who don’t yet realise they’re eligible.
The numbers that matter:
- HMRC sent letters to around 100,000 individuals between 22 September and 18 November 2025, after the new HICBC PAYE service went live in September 2025.
- Around 440,000 individuals paid HICBC in the 2022 to 2023 tax year, with many more believed to be liable but not yet declaring it.
- The charge applies where the higher earner in a household has adjusted net income over £60,000, with full clawback at £80,000.
- Child Benefit is worth £27.05 a week for the eldest child and £17.90 for each additional child from 6 April 2026.
- Registration deadline for the PAYE route is 31 January after the tax year ends — so 31 January 2027 for the 2025 to 2026 tax year.
Why HMRC has changed the rules
The High Income Child Benefit Charge has been a source of complaint since it was introduced in 2013. It pulled hundreds of thousands of PAYE employees into Self Assessment for the first time, often for a single reason: to repay some or all of the Child Benefit their household had received.
That changed in September 2025. HMRC launched a new online service, announced at the 2025 Spring Statement, to allow eligible taxpayers to pay HICBC without Self Assessment. It’s now fully operational.
Take-up has been slow, so HMRC has written directly to those it believes should be using the Child Benefit PAYE digital service. The ICAEW says HMRC “will be writing to around 100,000 individuals who appear to be liable to HICBC but who aren’t in ITSA to encourage them to use the HICBC PAYE service.”
Letters were sent in batches between 22 September and 18 November 2025. Each one includes a flowchart to help the recipient work out whether the charge applies.
How to pay Child Benefit charge through PAYE
Eligibility is narrow. Only taxpayers whose sole reason for being in Self Assessment is the HICBC can use the service. Anyone with other reasons to file — self-employment, rental income, capital gains above £3,000, or investment income over £10,000 — still needs to complete a return.
Mechanics are straightforward. HMRC uses real-time pay information already collected from employers to calculate the High Income Child Benefit Charge tax code adjustment, then updates the taxpayer’s code accordingly. Where the partner is the Child Benefit claimant, HMRC uses their National Insurance number to confirm exactly how much has been paid out.
There’s one important quirk. Anyone needing to settle HICBC for both the 2024 to 2025 and 2025 to 2026 tax years could see two years’ worth of charge land in a single PAYE code. Depending on the timing of the 2024/25 return and the switch to PAYE, the double charge may hit either the 2025/26 or 2026/27 code.
It can produce a sharp drop in take-home pay for that one year, so checking the tax code carefully matters. From 2026/27 onwards, the charge reverts to being collected in the year to which it relates — meaning Child Benefit charge through tax code 2026 onwards lands in the right year.
A quick recap on the charge itself. It’s 1% of the total Child Benefit received for every £200 of adjusted net income above £60,000, with full clawback at £80,000.
A parent earning £70,000 with two children would face a charge of around £1,125, equating to roughly £94 a month through the tax code. At £80,000 or above with two children, the full £2,251.60 is repaid — about £188 a month.
The State Pension trap many families miss
Here’s the part that often gets overlooked. To dodge the HICBC complexity, many families simply stopped claiming Child Benefit when one parent’s income passed the threshold. That’s a costly mistake.
Claiming Child Benefit gives the claimant — usually the parent who isn’t working or who earns less — automatic National Insurance credits towards the State Pension. Each qualifying year is worth approximately £358 a year in retirement income, based on the full new State Pension of £241.30 a week for the 2026 to 2027 tax year.
Numbers add up fast. Five missing years could reduce a State Pension by around £1,790 a year, which is roughly £35,800 across a 20-year retirement. LITRG has warned that parents who opt out of Child Benefit can lose these credits, and that doing so could reduce future State Pension entitlement for the non-earning or lower-earning partner.
The fix is simple: claim Child Benefit, opt into the HICBC PAYE service, accept the clawback through the tax code, and protect the NI credits. Families who previously opted out can restart a claim at any time via GOV.UK, although backdating is limited to three months.
If the higher earner is the named claimant and doesn’t need the credits, they can be transferred to a partner using form CF411A. This is a practical way to skip Self Assessment Child Benefit paperwork and still safeguard the lower-earning partner’s pension record.
Another planning angle is worth knowing about. Adjusted net income can be pulled below £60,000 by making additional pension contributions — particularly through salary sacrifice. A parent earning £65,000 who pays an extra £5,000 into a pension could fall below the threshold entirely, avoid the charge, and keep the pension growing.
HICBC and Your Next Steps
If you’ve been filing a Self Assessment return purely to pay the HICBC, you may now be able to drop out of the regime altogether and stop Self Assessment HICBC paperwork for good.
Switching to PAYE is simpler and automatic, and removes the year-end admin. You can also restart a Child Benefit claim you previously cancelled and protect valuable State Pension credits at the same time.
Switching isn’t fully automatic, though. There are steps to follow, and the order matters.
If your situation applies:
- De-register from Self Assessment first — HMRC won’t do this for you automatically.
- Wait until the following day, then register for the HICBC PAYE service via GOV.UK.
- Answer HMRC’s verification questions about which partner has the higher adjusted net income, and supply your partner’s National Insurance number if they receive Child Benefit. Your tax code should update within 48 hours.
For a fuller walkthrough of the Self Assessment side, our guide on the Child Benefit tax return explains how the charge interacts with a return. It also covers what to do if you need to file for an earlier year before switching.
Key Takeaways
- HMRC’s new digital service lets eligible PAYE employees pay Child Benefit charge through PAYE rather than via Self Assessment.
- Around 100,000 individuals have been written to by HMRC and asked to consider switching, with letters sent between 22 September and 18 November 2025.
- You can use the service only if your sole reason for filing a Self Assessment return is the HICBC; other reasons to file still require a return.
- Families who stopped claiming Child Benefit altogether may be losing National Insurance credits worth approximately £358 a year of State Pension for each qualifying year missed.
- Form CF411A can be used to transfer NI credits to a partner if the named Child Benefit claimant doesn’t need them.
- The deadline to register for the PAYE service for the 2025 to 2026 tax year is 31 January 2027.
