High Income Child Benefit Charge (HICBC): A Guide for Locum GPs with Children
Many locum GPs with children are affected by the High Income Child Benefit Charge but don't realise it. Here's how HICBC works, when it bites, and how to reduce or eliminate it.
The High Income Child Benefit Charge (HICBC) is one of the most common tax issues affecting locum GPs with children — and one of the least understood. Many GPs don’t realise they’re affected until they receive a Self Assessment penalty or an unexpected bill from HMRC.
What Is the High Income Child Benefit Charge?
If you or your partner receive Child Benefit and either of you has an adjusted net income above £60,000, you are subject to the HICBC. The charge claws back Child Benefit at a rate of 1% of the benefit for every £200 of income above £60,000.
Once adjusted net income reaches £80,000, the charge equals 100% of the Child Benefit received — effectively meaning you receive no benefit at all at that income level.
HICBC at a glance (2025/26)
| Adjusted net income | HICBC |
|---|---|
| Up to £60,000 | Nil |
| £60,001–£79,999 | 1% of Child Benefit per £200 above £60k |
| £80,000+ | 100% of Child Benefit received |
2023/24 note: The thresholds above apply from 2024/25 onwards. In the tax year 2023/24, the HICBC threshold was lower: the charge began at £50,000 and reached 100% at £60,000. If you are amending or reviewing a 2023/24 return, use the old thresholds. Many locum GPs with income between £50,000–£60,000 who received Child Benefit in 2023/24 may have an outstanding HICBC liability they were unaware of.
Example: A locum GP with two children receives £2,251.60/year in Child Benefit (2025/26 rates: £26.05/week for first child, £17.25 for each additional child). With an adjusted net income of £75,000, they are £15,000 above the threshold. The charge is: (£15,000 ÷ £200) × 1% × £2,251.60 = £1,688.70/year.
What Is “Adjusted Net Income”?
Adjusted net income (ANI) is not the same as gross income. It is:
Gross income − allowable expenses − pension contributions (NHS + private)
For sole-trader locum GPs, this means:
- Start with your total locum fees
- Deduct allowable business expenses (mileage, indemnity, subscriptions, etc.)
- Deduct NHS pension employee contributions (if applicable)
- Deduct any private/SIPP pension contributions
This is significant: pension contributions directly reduce your ANI, which can reduce or eliminate the HICBC.
How Does It Interact With Self Assessment?
The HICBC is collected via Self Assessment, not at source. If you or your partner receive Child Benefit and either of you earns above £60,000, you must register for and file a Self Assessment return, even if you wouldn’t otherwise need to.
If you have been receiving Child Benefit while earning above £60,000 and have not been filing a return, you may have an underpayment. HMRC can go back up to four years. It is worth checking your position now.
Can I Avoid the Charge?
There are two ways to deal with the HICBC:
Option 1: Reduce your adjusted net income below £60,000
Pension contributions are the most effective lever. Every £1 of additional pension contribution reduces your ANI by £1. Locum GPs with income around £60,000–£80,000 who have children receiving Child Benefit can sometimes eliminate the charge entirely by increasing NHS or SIPP pension contributions.
Example: A locum GP with ANI of £68,000 and £2,251.60 in Child Benefit faces an HICBC of (£8,000 ÷ £200) × 1% × £2,251.60 = £900.64. If they contribute an extra £8,000 to their SIPP, their ANI drops to £60,000 and the HICBC disappears entirely. The SIPP contribution also receives tax relief — effectively costing £4,800 net at 40% tax, while saving £900.64 in HICBC.
Option 2: Opt out of Child Benefit
The partner receiving Child Benefit can elect to stop receiving it. This is done via HMRC online. The advantage: no HICBC, no need to file a return just for this reason. The disadvantage: you lose the non-financial benefits of Child Benefit, including:
- National Insurance credits for the non-working or lower-earning parent (each year of Child Benefit counts toward the State Pension if you’re not working)
- Child Benefit number automatically assigned to the child (needed for future financial products)
If the receiving partner earns below £60,000 but the other earns above it, the HICBC falls on the higher earner — not the recipient. Both partners’ incomes are assessed; the charge applies to whichever partner has the higher income above the threshold.
The “Who Pays” Rule
The HICBC is charged on the higher earner if either partner’s income exceeds the threshold — regardless of who receives the Child Benefit. This means:
- If one partner receives Child Benefit and earns £40,000, and the other (the locum) earns £75,000, the locum pays the HICBC via their Self Assessment return
- The receiving partner does not need to file a return just for this
What Child Benefit Rates Apply?
| 2025/26 | Weekly | Annual |
|---|---|---|
| Eldest/only child | £26.05 | £1,354.60 |
| Additional children | £17.25 each | £897.00 each |
Two children: £2,251.60/year total. At an income of £80,000+, all £2,251.60 is clawed back.
Practical Steps
- Check if you or your partner receive Child Benefit and whether either income (on an ANI basis) is above £60,000
- Calculate your ANI — use the tax calculator on this site to estimate taxable profit, then factor in pension contributions
- If you’re in the £60–80k range, model whether increased pension contributions eliminate or reduce the charge
- Register for Self Assessment if you haven’t already and are above the threshold
- Consider whether opting out of Child Benefit makes sense — particularly if there’s no non-working partner who would lose NI credits, and the ANI is consistently above £80,000
This article is for general information. For personalised advice on HICBC, pension planning, and adjusted net income calculations, speak with a locum-specialist accountant or financial adviser.