In the 2022/23 tax year, 7,007 parents did not notify HMRC they earned more than the £50,000 threshold allowed to receive Child Benefit, according to Quilter’s Freedom of Information request to HMRC.
However, in 2023/24, the number plummeted to just 75 parents at a total charge of £45,443 – compared to the £4,503,321 charged in the five years before.
So far this tax year, only 46 penalty charges have been issued.
The HICBC is what parents must pay if either partner receives Child Benefit and earns over £60,000 (previously £50,000). This is also applied to a spouse not related to the child but who lives with them as a guardian and contributes an equal amount towards their upkeep.
However, if the Treasury is not notified, the benefit is claimed back.
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The charge has been long criticised by campaigners for penalising families where one partner earns more than the £50,000 threshold, who will not receive the £26.05 per week payment for their child (as of 7 April 2025).
But the system in place allows Child Benefit to be paid to a household earning up to £99,998, as long as neither partner earns over £50,000.
The threshold increased to £60,000 in the Conservatives’ final Budget in 2024, and there were plans to shift towards considering the whole household’s income in April 2026.
However, those plans were scrapped by Labour, who said the change would be too expensive to enforce.
If a parent earns more than the limit set by the Government, they usually need to complete a self-assessment tax return to let them know. From the summer this year, this can be managed through a repayment plan taken out of the affected parent’s wages.
‘Collapse reflects pressure rightly built over years’
Holly Tomlinson, financial planner at Quilter, said: “The collapse in these penalties is no accident – it reflects the pressure that has rightly built up over the years about how unfair the system was.
“Huge media attention highlighted the absurdity of a single parent losing all their Child Benefit, while a couple, each earning just under the threshold, could keep the lot. The Government has finally accepted this doesn’t pass the fairness test and is now using carrot rather than stick to help people keep to the rules.”
Tomlinson added: “In the meantime, families still need to tread carefully. If you opt out of receiving Child Benefit to avoid the charge, make sure the parent who is not working or earning less still gets their National Insurance credits, which count towards the state pension. And for those hovering near the income threshold, salary sacrifice into a pension can be a wise financial planning tactic – it reduces your adjusted net income and can bring you back below the charge entirely.
“While Labour look set to let the clear inequalities remain baked into the system, at least they are making it easier for people to pay back any additional Child Benefit they are not eligible for.”
Penalty payments
| Tax year | Failure to notify penalty numbers | Amounts charged |
| 2018/19 | 13,527 | £6,942,371 |
| 2019/20 | 9,804 | £3,150,294 |
| 2020/21 | 4,914 | £2,481,349 |
| 2021/22 | 10,834 | £6,051,487 |
| 2022/23 | 7,007 | £4,503,321 |
| 2023/24 | 75 | £45,443 |
| 2024/25* | 46 | £23,326 |
