How does the High Income Child Benefit Charge work if I'm self-employed?

In 2026-27, if your adjusted net income is over £60,000, you pay back 1% of your family's Child Benefit for every £200 above it, and all of it from £80,000. Self-employed people pay it through their tax return.

The High Income Child Benefit Charge is an Income Tax charge that claws back some or all of the Child Benefit paid to you or your partner. The rules below follow the Income Tax (Earnings and Pensions) Act 2003 and GOV.UK, checked on 17 October 2026, for the tax year 6 April 2026 to 5 April 2027.

How the charge is worked out

The charge is a percentage of the Child Benefit paid for the year: 1% for every full £200 of adjusted net income over £60,000, rounded down. At £80,000 it reaches 100%, and the charge is never more than the benefit itself.

For 2026-27 Child Benefit is £27.05 a week for the eldest or only child and £17.90 a week for each other child. The tax return counts every week that starts on a Monday inside the tax year. Because 6 April 2026 and 5 April 2027 are both Mondays, 2026-27 has 53 Child Benefit weeks, not the usual 52. A full year for two children is £2,382.

Adjusted net income for a sole trader

Adjusted net income is not your turnover. It starts with your taxable income: your trading profit after allowable expenses, plus any wages, savings interest, dividends or rental profit. Then, following GOV.UK's steps:

• trading losses you claim against your income come off;
• Gift Aid donations come off at the grossed-up amount, £1.25 for every £1 you give;
• personal pension contributions where the provider claims basic rate relief come off at the grossed-up amount, £1.25 for every £1 you pay in.

If you work under the Construction Industry Scheme (CIS), your income on the return is your pay before deductions. CIS deductions are tax paid in advance, so they do not lower your profit or your adjusted net income.

Pension contributions also bring extra tax relief once your income is over £50,270 (outside Scotland), as our guide to pension tax relief for sole traders explains.

Who pays it

If your adjusted net income is over £60,000 and higher than your partner's, you pay the charge, even if your partner is the one who gets the Child Benefit. A partner means someone you are married to, in a civil partnership with, or living with as a couple, and not permanently separated from. If your partner will not tell you their income, you can write to HMRC, which will only answer yes or no.

Through your tax return, not your tax code

HMRC has an online service to pay the charge through PAYE, by changing your tax code. GOV.UK is clear that it is not for you if you need to send a tax return for another reason, such as being self-employed. You declare the Child Benefit on your Self Assessment return instead, and the charge is added to your tax bill, due by 31 January.

Most sole traders already file a return. If you do not, GOV.UK says you must tell HMRC by 5 October after the tax year, so by 5 October 2027 for 2026-27, and you may get a penalty if you do not register or do not declare the Child Benefit.

Worked example

Dave is a self-employed plumber with two children, and his partner earns less than he does. In 2026-27 he takes £84,000 before costs and spends £16,000 on materials, van and tools, so his profit is £68,000. He has no other income.

Paying £4,000 into a personal pension cuts his charge by £595. As a higher rate taxpayer outside Scotland, he can also claim £1,000 of extra relief on his return: 20% of the £5,000 gross. Your own figures will differ.

Keep the claim, even if you stop the payments

You can opt out of Child Benefit payments and stay registered. You then pay no charge for the weeks you are not paid. Staying registered matters: a parent registered for Child Benefit for a child under 12 gets Class 3 National Insurance credits, which count towards the State Pension, even without the payments. Your child also gets a National Insurance number shortly before they turn 16, without applying. The credits go to the person named on the claim, which matters most when that partner earns little or nothing.

Under Making Tax Digital

Making Tax Digital for Income Tax (MTD) does not change how the charge works. Your quarterly updates only cover self-employment and property income and expenses, so Child Benefit is not in them, and the tax estimate after each update may leave the charge out. HMRC's guidance for software developers says your software lets you enter the Child Benefit details at the end of the year, for the tax return you submit from your MTD software by 31 January.

What this means for you

If your profit plus other income is heading over £60,000 in 2026-27, work out your adjusted net income before 5 April 2027, while a pension payment can still count for this year. Below £80,000 the charge is less than the Child Benefit paid, so keeping the payments leaves some of it with your family. From £80,000 the whole amount goes back, so opting out of payments while staying registered means no charge and the credits carry on.

Steps to take for 2026-27

1. Estimate your 2026-27 profit and add any other income, such as wages, interest or rent.
2. Take off grossed-up pension contributions and Gift Aid to get your adjusted net income.
3. Compare your figure with your partner's. The higher earner pays, if either of you is over £60,000.
4. Decide whether to keep the payments or opt out, and keep the claim registered either way.
5. If you do not already file a tax return, register for Self Assessment by 5 October 2027.
6. Enter the Child Benefit on your 2026-27 return and pay by 31 January 2028.

Use the free MTD check to see when Making Tax Digital starts for you, and the trades section for more guides on tax for tradespeople.