From 7 April 2025, families across the UK will receive a welcome boost to their Child Benefit payments. HM Revenue and Customs (HMRC) has announced an increase in weekly Child Benefit rates, rising to £26.05 for the eldest or only child and £17.25 for each additional child. This equates to £1,354.60 annually for the first child and £897 for each subsequent child.
These payments are typically made every four weeks and are deposited directly into claimants’ bank accounts. Parents can manage their Child Benefit claims quickly and easily using the HMRC app, which allows them to submit, amend, or review their claim information.
Why This Matters for Employers
While Child Benefit is a personal entitlement, employers have an important role to play in supporting their workforce by raising awareness and helping employees navigate related tax and payroll matters.
1. Support Employee Financial Wellbeing
With the cost of living continuing to rise, this increase in Child Benefit can provide valuable financial relief to employees with children. Employers can help by:
- Sharing information about the new rates.
- Encouraging staff to check their Child Benefit eligibility.
- Signposting resources for claiming and managing their benefit.
Supporting your team’s financial wellbeing can improve morale, reduce stress, and contribute to a more focused and engaged workforce.
2. High Income Child Benefit Charge (HICBC) – Payroll Implications
Employees earning between £60,000 and £80,000 may be impacted by the High-Income Child Benefit Charge (HICBC). Starting from summer 2025, HMRC will allow affected individuals to pay this charge via their PAYE tax code, removing the need to complete a Self-Assessment tax return in many cases.
Employers should:
- Make sure payroll systems are ready to accommodate new tax codes.
- Provide guidance or resources to high-income employees on how this change will affect them.
- Monitor communications from HMRC to stay updated on implementation timelines.
3. Encourage Prompt Claims for Maternity and Parental Leave
New parents may not always know that Child Benefit can only be backdated for three months. It’s important to remind employees going on maternity or parental leave to submit their claims as soon as possible following the birth of their child to avoid missing out.
4. National Insurance Credits and State Pension
One often-overlooked benefit of claiming Child Benefit is the automatic allocation of National Insurance (NI) credits, which contribute to an individual’s State Pension. Even if an employee chooses to opt out of receiving payments to avoid the HICBC, they should still complete the claim to protect their NI record.
Employers can support staff by:
- Educating them about the long-term importance of NI credits.
- Encouraging them to claim even if they don’t wish to receive the payments.
Key Actions for Employers
To help your team make the most of the upcoming changes, here’s what employers should do:
- Inform staff about the new Child Benefit rates from 7 April 2025.
- Educate high-income earners about PAYE tax code changes for HICBC.
- Prepare your payroll team for updated tax codes and deductions.
- Remind new parents to claim Child Benefit promptly to avoid missing payments and NI credits.
Helping Your Business and Your People Thrive
At EOACC, we support both businesses and individuals in understanding tax and benefit changes. If you or your employees would like advice on Child Benefit, payroll implications, or financial planning, don’t hesitate to get in touch with our expert team.
Learn more: Child Benefit boost for millions of families