The number of penalties issued under the high-income child benefit charge (HICBC) has dropped significantly over the past few years, falling from over 13,000 in 2018/19 to just 45 in 2024/25.
In 2018/19, HMRC issued 13,527 “failure to notify” penalties, raising nearly £7 million. This fell to 9,804 penalties in 2019/20, with revenue more than halving to £3.15m. During the pandemic year of 2020/21, penalties dropped again to 4,914, though HMRC still recovered £2.5m.
There was a spike in 2021/22 when penalties surged to nearly 11,000, raising over £6m. But numbers have since been on a steady decline. In 2022/23, 7,007 penalties brought in £4.5m. A sharp fall followed in 2023/24, with just 75 penalties issued and £45,443 collected.
So far in 2024/25, HMRC has issued only 45 penalties, recovering £23,326.
HICBC has long faced criticism for its structure. A common complaint is that it unfairly targets single high earners while two parents earning just under the threshold escape the charge.
The threshold increased from £50,000 to £60,000 in April 2024. HMRC also plans to collect HICBC via PAYE, but this will not be implemented until at least summer 2025.
The previous Conservative Government proposed a household income-based system, but Labour, elected in July 2024, has paused the plan due to its estimated £1.4bn cost by 2029/30.
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