The HICBC taper in 2026/27 runs from £60,000 to £80,000 of adjusted net income. For every £200 of income above £60,000, 1% of Child Benefit is owed back. So at £70,000 you owe 50%; at £80,000 you owe 100%. For a parent of two children, the effective marginal tax rate on the £60k–£80k slice is approximately 52% (40% income tax + 2% NI + ~10% HICBC). With three children it's ~55%. With four, ~58%. This makes salary sacrifice the most efficient retirement contribution route available for parents in this band.
The arithmetic
Step 1: Calculate adjusted net income (ANI).
Step 2: If ANI ≤ £60,000, no HICBC.
Step 3: If ANI ≥ £80,000, 100% HICBC (all Child Benefit owed back).
Step 4: If £60,000 < ANI < £80,000, calculate:
- Excess income = ANI − £60,000
- Clawback % = (Excess income ÷ £200) × 1% — capped at 100%
- HICBC owed = Child Benefit received × clawback %
Child Benefit amounts 2026/27
| Children | Per week | Per year |
|---|---|---|
| First child | £26.05 | £1,355 |
| Each additional child | £17.25 | £897 |
| 2 children total | £43.30 | £2,251 |
| 3 children total | £60.55 | £3,149 |
| 4 children total | £77.80 | £4,046 |
Rates update each April; the figures above are 2025/26 published rates (carried into 2026/27 unless changed).
Worked examples across the taper
| ANI | Clawback % | 2 kids HICBC | 2 kids retained | Effective marg rate |
|---|---|---|---|---|
| £60,000 | 0% | £0 | £2,251 | 42% |
| £62,000 | 10% | £225 | £2,026 | ~53% |
| £65,000 | 25% | £563 | £1,688 | ~53% |
| £68,000 | 40% | £900 | £1,351 | ~53% |
| £70,000 | 50% | £1,126 | £1,125 | ~53% |
| £75,000 | 75% | £1,688 | £563 | ~53% |
| £80,000 | 100% | £2,251 | £0 | ~53% |
| £80,001 | 100% | £2,251 | £0 | 42% |
The effective marginal rate on the £60k–£80k slice is constant at ~53% for two children. The constancy is because the taper rate (1% of CB per £200 of income = £11.25 per £200 of income for two kids = 5.6% of each marginal £200) stacks on top of the normal 42% (40% IT + 2% NI). Once income passes £80k, the rate drops back to 42% — until £100k where the 60% trap begins.
Why salary sacrifice is so powerful in this band
Every £1 of salary sacrificed into a pension at this income band:
- Saves 40p of income tax (you'd have paid 40% on it).
- Saves 2p of NI (employee NI is 2% above £50,270).
- Saves another ~10p of HICBC (because £1 less ANI means £1 less in the taper).
Total relief: 52% on every £1 sacrificed, for a parent of 2 children. For 3 children it's ~55%; for 4 it's ~58%.
This means your net take-home foregone for £1 in the pension is 48p (2 kids), 45p (3 kids), or 42p (4 kids). Compare to the standard 42% relief at this income band without HICBC — salary sacrifice is dramatically more efficient if you're a parent.
Planning levers
If you're at £65k–£80k of adjusted net income with children, three levers to consider:
- Workplace pension salary sacrifice. Most employer schemes allow you to flex contributions. Pushing ANI to £60k via pension contributions eliminates HICBC entirely.
- Gift Aid. Donations to charity (with Gift Aid) reduce adjusted net income £1-for-£1. £1,000 donated reduces ANI by £1,250 (the gross amount). At a 53% effective rate, the net cost of donating £1,000 is just £470 — and the charity gets the full £1,250.
- Bonus deferral or sacrifice. If a bonus pushes ANI from £60k to £75k, sacrificing the bonus into the pension keeps ANI at £60k and saves both income tax + NI + HICBC.
The compounding problem at £100k
HICBC is fully repaid by £80,000. Between £80,000 and £100,000, the marginal rate falls back to 42% — relatively benign. Then at £100,000, the 60% trap begins (Personal Allowance taper). So the marginal rate pattern across the high-earner band is:
| £50,270–£60,000 | 42% (higher rate + NI) |
| £60,000–£80,000 (with 2 kids) | ~53% (+ HICBC taper) |
| £80,000–£100,000 | 42% (higher rate + NI) |
| £100,000–£125,140 | 62% (+ PA taper) |
| £125,140+ | 47% (additional rate + NI) |
For parents earning £85k–£100k with children, the position is favourable — you've already paid full HICBC, but you're not yet in the 60% trap. The £15k window between £85k–£100k is the most tax-efficient earnings range in the higher-rate band.
Sources and methodology
The figures above follow HMRC's published 2025/26 Child Benefit rates (carried forward to 2026/27) and HICBC threshold structure from the 2024 Finance Act amendments. See Child Benefit rates and HICBC guidance. The marginal-rate arithmetic uses standard England/Wales/NI tax bands; Scotland figures differ. For a personalised calculation, see the HICBC calculator. The methodology page documents sources.
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