The rule means households should make repayments to HMRC.
Little one Profit claimants with an annual revenue of £80,000 or extra should repay funds in full (Picture: Getty)
HM Income and Customs (HMRC) has confirmed an £80,000 rule for the 2026/27 tax yr that may see UK households hit with a reimbursement cost.
The rule impacts excessive earners claiming Little one Profit funds, with those that exceed a strict revenue threshold being topic to pay the Excessive Earnings Little one Profit Cost (HICBC). Beneath the HICBC, if you happen to or your associate earn £60,000 per yr or extra then you’ll have to begin repaying the profit again to HMRC. However the extra you earn, the extra you’ll should repay and when you hit earnings of £80,000 per yr, then you could pay again the complete quantity.
We use your sign-up to supply content material in methods you’ve got consented to and to enhance our understanding of you. This will embrace adverts from us and third events primarily based on our understanding. You may unsubscribe at any time. Learn our Privateness Coverage
Whereas excessive earners can nonetheless declare Little one Profit, HMRC will begin to claw funds again at a charge of 1% for each £200 you earn above £60,000. And when your annual revenue reaches £80,000 or extra, the complete quantity should be repaid to HMRC.
- HMRC confirms new gas charges for petrol, diesel and electrical vehicles from June 1
- HMRC confirms £10 prices every single day for UK households in June
In case your adjusted web revenue is over the edge and so is your associate’s, then whoever has the upper revenue is chargeable for paying the tax cost. ‘Accomplice’ refers to somebody you’re not completely separated from who you’re married to, in a civil partnership with or residing with as if you happen to had been.
Confirming the rule for the brand new 2026/27 tax yr, HMRC stated: “From tax yr 2024 to 2025 onwards, if you happen to or your associate earn greater than £60,000 a yr, you’ll should pay a few of your Little one Profit again. If you happen to or your associate earn £80,000 or extra, you’ll should pay all of it again.
“You’ll pay again 1% of your Little one Profit for each £200 you earn over the edge. Instance: Your adjusted web revenue is £67,600 in tax yr 2024 to 2025. That is £7,600 over the £60,000 threshold. As 7,600 divided by 200 is 38, you’ll pay again 38% of your Little one Profit.”
In case your revenue exceeds the edge, you possibly can select to both get Little one Profit funds and pay the tax cost, or decide out of getting funds and never pay the tax cost.
If you happen to do decide to pay the tax cost, this may be finished in two other ways – both by paying the cost by your PAYE tax code or by Self Evaluation.
HMRC stated you could pay the tax cost by Self Evaluation if it is advisable ship a tax return for an additional motive, reminiscent of if you happen to’re self-employed or every curiosity on financial savings or investments.
Moreover, if it’s later than January 31 within the yr after the tax yr it is advisable pay for, then you could pay the tax cost by Self Evaluation.
Those that decide out of receiving Little one Profit funds will stay registered for the profit. This implies you gained’t obtain funds and so gained’t should pay the tax cost, however you’ll nonetheless get Nationwide Insurance coverage credit which depend in direction of your State Pension, and a Nationwide Insurance coverage quantity on your baby, with out them having to use earlier than they flip 16.
HMRC issued a reminder to households on the finish of final month that Little one Profit can nonetheless be claimed even when you’ve got a excessive revenue, however you may be topic to pay the HICBC. Writing in a publish on X, HMRC stated: “Simply had a child? Congratulations!
“If you happen to or your associate earn between £60,000 and £80,000, you possibly can nonetheless declare Little one Profit. Our new digital service allows you to pay the Excessive Earnings Little one Profit Cost by your wage – no tax return wanted.”
Little one Profit funds have been given a lift for the 2026/27 tax yr, with an uplift on April 6 taking charges to £27.05 per week for the primary or eldest baby, and £17.90 for any further youngsters – an annual enhance of £52 and £33.80 respectively.
Over a full yr, this quantities to a complete of £1,406.60 per yr for the eldest or solely baby, and a further £930.80 per yr for every further baby, with no restrict as to what number of youngsters mother and father can declare for.
Leave a Reply