Recent data from HM Revenue & Customs (HMRC) shows a dramatic fall in penalties issued under the High Income Child Benefit Charge (HICBC) – from over 13,500 in 2018/19 to just 46 in 2024/25.
This collapse in enforcement activity may suggest the charge is no longer a concern.
In reality, it is a reminder that while HMRC might be easing off on penalties, they still expect people to understand the rules and get things right.
This is where clear, reliable tax support makes a difference.
From thousands of penalties to just a handful – what changed?
When the HICBC was first introduced in 2013, it caused confusion for many families.
Penalties for failing to notify HMRC of the charge were widespread.
In 2018/19, over 13,500 penalties were issued, generating nearly £7 million in revenue.
Even during the pandemic, thousands of families were still being penalised for non-compliance.
However, since 2021/22, both the number of penalties and the amounts recovered have dropped sharply.
By 2024/25, just 45 penalties were issued, raising only £23,326.
HMRC tweaks the system, but families still face the same flaws
In 2024, the income threshold at which the charge begins to apply increased from £50,000 to £60,000.
This change was broadly welcomed and reduced the number of families affected.
In addition, HMRC has confirmed it will introduce a facility to collect the charge through the PAYE system, which is currently expected to happen this summer.
However, more fundamental reform, such as assessing liability based on household income rather than an individual’s, has been paused by the current Government due to cost concerns.
As a result, the structure of the charge remains unchanged.
A single earner in a household can still be liable even if the other parent earns nothing, while two parents earning just under the threshold are unaffected.
It is not always obvious, but the HICBC can still catch people out
Despite the decline in penalties, the HICBC remains in force, and taxpayers must continue to assess their liability correctly, as understanding how the charge works is not always straightforward.
Misunderstandings still occur, particularly if you assume that if you are not receiving Child Benefit payments, the charge cannot apply, when in fact, the eligibility to receive the benefit (not whether it is claimed) is what matters.
Our team can help you make sense of the High Income Child Benefit Charge and make sure you understand your position so you avoid any surprises from HMRC. Contact us today for more information.
