26 May 2026
Fewer than one in ten families who could have avoided filing a tax return under HMRC’s new PAYE‑based system for collecting the High Income Child Benefit Charge have so far made the switch, newly released figures suggest.
Freedom of Information data from HMRC, obtained by Quilter, shows that 8,840 people used the digital PAYE service in the 2025/26 tax year, with a further 1,239 having signed up so far in 2026/27, as at 13 May.
These figures can be compared with separate HMRC data, obtained by Quilter in October last year, which showed that 126,000 taxpayers were in Self Assessment in 2022/23 where they were liable for HICBC but all income sources are either employee earnings or pensions, so in principle, suitable for PAYE collection.
Comparing the two datasets suggests that only around 7% of those previously drawn into Self Assessment purely because of the charge have so far switched to the new PAYE system.
While the Self Assessment eligibility figures relate to a period when the charge applied from £50,000 rather than today’s £60,000 threshold, they remain a useful indication of scale. Although the higher threshold may have reduced the number of families affected at the margin, prolonged threshold freezes combined with strong nominal wage growth mean many households have since drifted back into the charge.
As a result, the pool of families potentially drawn into Self Assessment purely because of the charge, and therefore able to benefit from PAYE‑based collection, is unlikely to have reduced materially. However, the amount of the charge may have reduced due to the threshold change.
The figures highlight the ongoing complexity of the High Income Child Benefit Charge and suggest many families may not yet be aware that an alternative to Self Assessment is available, or how it operates in practice.
HMRC has confirmed that the charge is recalculated whenever updated income information is received, meaning PAYE tax codes can change during the year and making it difficult to identify how often adjustments are driven specifically by the charge rather than other income changes.
From a financial planning perspective, this underlines the importance of parents actively keeping track of how the charge is being collected, particularly where income fluctuates. Using PAYE does not remove the need to monitor income thresholds, and errors can still arise if HMRC does not hold up‑to‑date or complete information.
Shaun Moore, tax and financial planning expert at Quilter, said: “It is laudable that the government has opted to introduce a PAYE‑based system for collecting the High Income Child Benefit Charge, and it is understandable that a reform of this nature may take time to bed in. However, the low take‑up so far suggests that awareness remains limited and that many families simply do not realise an alternative to Self Assessment now exists. As a result, people may be continuing to file tax returns unnecessarily.
“We also need to recognise that this issue is likely to grow rather than fade. While the threshold was raised to £60,000, strong wage growth combined with frozen thresholds means more families will continue to be brought into scope over time, including many for whom the policy was never originally designed. With the threshold unlikely to be uprated in the near future, it becomes increasingly important that HMRC and employers do more to ensure people understand their options.
“For families close to the child benefit threshold, pension salary sacrifice remains one of the most effective and legitimate ways of managing adjusted net income and protecting entitlement. But with more households likely to be affected in future, improving awareness of how the charge works and how it can be managed is becoming increasingly important.”
