Child Benefit rises for 6.9 million families as HMRC urges claims

From next week, Child Benefit payments are set to rise, with some households able to receive up to £1,406 a year. HM Revenue and Customs has confirmed that more than 6.9 million families will see their payments increase from April 6, as part of annual uprating changes. Under the new rates, parents will receive £27.05 per week for their eldest or only child, equivalent to £1,406.60 a year. The increase is worth an extra £52 a year for the first child and £33.80 for each additional child.

Despite these increases, only around 72% of families claim Child Benefit within their child’s first year, meaning many lose out on money they are entitled to. HMRC is urging new parents to act quickly, as claims can only be backdated for a maximum of three months. Child Benefit is typically paid every four weeks directly into a bank account, and there is no limit to the number of children a family can claim for. The fastest way to apply is via the HMRC app or online, with around 85% of claims now made digitally. Since the service launched, more than 1.5 million families have used it to submit applications, while hundreds of thousands more use it to manage their payments. Parents will need details including their child’s birth or adoption certificate, bank details and National Insurance numbers to complete a claim. Additional support tools are also available through Money and Pensions Service, which offers a benefits calculator and budgeting guidance for new parents.

Families with higher incomes should be aware of the High Income Child Benefit Charge, which applies where one partner earns more than £60,000 a year. In such cases, some or all of the benefit may need to be repaid. HMRC has issued a reminder highlighting the High Income Child Benefit Charge, which applies when at least one person in a household crosses the earnings threshold. The threshold was increased from £50,000 to £60,000 from the 2024–25 tax year. Once income exceeds £60,000, some of the benefit must be repaid, and at £80,000 or above, the full amount is clawed back. The repayment works on a sliding scale: families repay 1% of their Child Benefit for every £200 earned above £60,000. For example, someone earning £67,600 would repay 38% of their benefit. HMRC says the calculation is based on adjusted net income, which includes salary, savings interest, and dividends, worked out before personal allowances but after certain reliefs such as pension contributions and Gift Aid.

There are two main ways to pay the charge: through Self Assessment or via PAYE, deducted automatically from salary. The PAYE option is now being promoted more heavily, allowing employees who do not normally file tax returns to avoid registering for Self Assessment. Once set up, HMRC adjusts your tax code and collects the charge automatically, though PAYE can only be used if it is before January 31 following the relevant tax year. If you already file a tax return for other reasons, you must still use Self Assessment. If both partners earn above the threshold, the higher earner pays the charge. Families can choose to stop receiving Child Benefit payments altogether to avoid the charge, but even if payments are stopped, it is still worth registering because it preserves National Insurance credits towards the State Pension and automatic allocation of a National Insurance number for the child at age 16. The warning comes as many households drift into the higher income bracket due to pay rises, potentially triggering the charge without realising, and HMRC is urging parents to check their position and use its online tools to avoid being caught out.

Parents may still qualify for more than £100 each month even after their child surpasses the usual age threshold for Child Benefit. Unless parents inform HMRC that they remain eligible, the payments will stop automatically when their child turns 16. HMRC has issued a reminder to parents with teenagers between 16 and 19 years old, urging them to check their entitlement as the benefit will terminate without intervention. Child Benefit offers financial assistance to those with parenting responsibilities, National Insurance credits for people who might need to cut back on work hours owing to caring duties, and a National Insurance number for the child listed on the application. Should parents notify HMRC that their child is embarking on approved training or continuing in full-time education, the payments and associated benefits can be extended until the child reaches 20, but if the department is not informed, the benefit will cease. HMRC defines 'full time' education as more than an average of 12 hours per week of supervised study or course-related work experience, though if your child has an illness or disability they may be able to complete fewer hours if that is more appropriate for them. Parents can inform authorities online if their child is continuing in approved education or training beyond the age of 16, and these notifications should generally be submitted before August 31 to avoid disruptions in your payments.

Millions of UK households could reclaim as much as £2,000 from HM Revenue and Customs this year through the Tax-Free Childcare scheme, though the scheme carries a three-month warning. The tax authority runs a programme whereby many earning under £100,000 may be eligible for the government support. Tax-Free Childcare works by helping families cut expenditure on childcare costs for working parents. Alongside earning below the threshold mentioned, you'll qualify if you have a child aged under 11, or 16 if your child has a disability. It's worth up to £2,000 per child annually, or up to £4,000 if your child is disabled. Upon registering for Tax-Free Childcare, the government will contribute £2 for every £8 you deposit into your online account. The discount can be used to cover school clubs, childminders and other wraparound care. Your childcare provider must be enrolled in the scheme for you to process payments and claim the top-ups. For parents of disabled children, the additional funds from Tax-Free Childcare can be used to pay for extra childcare hours and to assist providers in obtaining specialised equipment required by your child, such as mobility aids.

Your eligibility for tax-free childcare depends on a number of factors, including your employment status, earnings, your child's age and circumstances, and your immigration status. According to HMRC, you can generally access the scheme if you're in employment, on sick or annual leave, or on shared parental, maternity, paternity or adoption leave, and you're returning to work within 31 days of the date you first applied. Even if you're not currently in employment, you may still qualify if your partner is working and you receive Severe Disability Allowance, Incapacity Benefit, Carer's Allowance, Carer Support Payment (Scotland only) or contribution-based Employment and Support Allowance. Regardless of your circumstances, however, if you wish to continue claiming, you must confirm your details are up to date with HMRC every three months, and failing to do so will result in the government halting any payments into your Tax-Free Childcare account. Tax-Free Childcare is a UK-wide scheme covering England, Scotland, Wales and Northern Ireland, open to all parents of children under 12 (or under 17 if disabled). To apply, you must open a Tax-Free Childcare account online, and to be eligible, you must be working (and if you have a partner they must work too), and you must not be receiving any support through Universal Credit. Usually both parents in a couple must work on an employed or self-employed basis and have an income of at least £2,643 each every three months, though recently self-employed people are allowed start-up periods where this income level doesn’t have to be met, or can use an average over the tax year. Periods on maternity leave, sick leave, paternity leave, parental leave, adoption leave and shared parental leave will count as being in work for any older children already enrolled in the scheme, with eligibility limited to the last 31 days of leave where parents are claiming for a new child, whose birth or adoption led to the time off. It will run according to the school year – so that disabled children will be eligible until the September after their 16th birthday, while other children will be eligible until the September after their 11th birthday. Parents pay money into a childcare account, which the government tops-up by 25%, and if you are having difficulty with your Tax-Free Childcare account you can call the childcare service helpline. If you are due to start work (or return to work) you do not have to wait until you start work to apply for Tax-Free Childcare.

Brits have been warned that they should check what they should repay to see if they could owe HMRC money. Parents earning more than £60,000 are being urged to check whether they need to repay Child Benefit – or risk an unexpected tax bill.

The financial impact on families from these changes is significant, with the Child Benefit increase providing direct support to millions amid cost-of-living pressures. Government support through both Child Benefit and Tax-Free Childcare aims to alleviate childcare costs, though complexities in eligibility and repayment requirements may limit uptake for some households.

Several unknowns remain regarding these benefits. The precise age cutoff for Tax-Free Childcare eligibility for non-disabled children is unclear, with sources conflicting on whether it is under 11 or under 12. Full and accurate income eligibility criteria for Tax-Free Childcare, including any upper limits and minimum requirements, also require clarification due to differing reports. It is not known how many families are currently affected by the High Income Child Benefit Charge, nor the total amount being repaid annually. Specific measures HMRC is taking to increase the claim rate for Child Benefit beyond the current 72% within the first year have not been detailed.