Thousands of families hit by Child Benefit tax charge failing to sign up to new payment system
Tens of thousands who are eligible to pay the High Income Child Benefit Charge through a new payment system still haven’t signed up, new research shows
Less than one in 10 families eligible to pay a Child Benefit charge through a new streamlined payment system have signed up for the service, new figures suggest.
HMRC rolled out a new payment system in October 2025 allowing parents to have the High Income Child Benefit Charge (HICBC) deducted directly through their salary or pension via Pay As You Earn (PAYE) instead of a self-assessment tax return.
Households claiming Child Benefit need to pay HICBC when an individual's annual income exceeds £60,000.
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HMRC deducts 1% for every £200 of income above this threshold until income reaches £80,000, when taxpayers lose eligibility for any Child Benefit.
Figures from wealth management firm Quilter previously estimated more than 100,000 taxpayers could be eligible to pay the HICBC through the new payment system.
However, new Freedom of Information (FOI) figures from HMRC obtained by the firm show only a fraction of this amount have signed up for the service so far.
Just 8,840 people used the digital PAYE service in the 2025/26 tax year, with a further 1,239 having signed up so far in 2026/27 (as of 13 May).
But this leaves 90,000 who will have to carry on paying the tax charge through self-assessment.
Shaun Moore, tax and financial planning expert at Quilter, said: “It is laudable that the government has opted to introduce a PAYE‑based system for collecting the HICBC, and it is understandable that a reform of this nature may take time to bed in.
“However, the low take‑up so far suggests that awareness remains limited and that many families simply do not realise an alternative to self-assessment now exists. As a result, people may be continuing to file tax returns unnecessarily.”
How to pay the HICBC through the new system
HMRC has a dedicated page on its website where eligible taxpayers can register to pay the HICBC through PAYE.
You are eligible to use this system to pay HICBC if you do not need to send a tax return for another reason. For example, if you are self-employed and would ordinarily need to file a self-assessment tax return, you won’t be able to pay the charge through PAYE.
You also have to pay the charge before or on the 31 January after the tax year you need to pay for. So, if you want to pay the charge via PAYE for the current tax year (2026/27), you need to pay on or before 31 January, 2028.
If you are paying for 2025/26, you would need to pay on or before 31 January, 2027.
If you currently complete a self-assessment tax return solely to pay the HICBC, you can contact HMRC to leave self-assessment and register to pay through PAYE. The number to call is 0300 200 3310.
You can also do this through the gov.uk website.
Once you’ve switched, HMRC will update your tax code and you will pay the charge through a deduction from your salary or pension income.
HMRC will send details of your new tax code to you and your employer. If you receive income from a pension, HMRC will send the new tax code to your pension provider.
Is it worth claiming Child Benefit if you earn over £80,000?
You might think claiming Child Benefit is pointless if you or your partner earns over the £80,000 threshold, as you will repay the money via HICBC.
However, if your child is under the age of 12, it is still worth claiming the benefit and telling HMRC you don’t want to receive the payments. This is because you can get National Insurance credits.
This is particularly useful for people who are missing NI years and aren’t in line to receive a full state pension – the credits can plug some gaps on your National Insurance record, helping you build up your state pension entitlement.
It also means your child can receive their NI number without you having to apply for it. The number is usually sent before their 16th birthday.
