Having Children & Tax Implications

From Child Benefit to Tax-Free Childcare, here’s a guide to the tax benefits, reliefs, and obligations that come with having children.

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Child Benefit

Child Benefit is a tax-free payment for each child you’re responsible for. In 2025/26:[1]

ChildWeekly RateAnnual Amount
Eldest/only child£26.05£1,354.60
Each additional child£17.25£897.00

Always claim Child Benefit even if you earn too much to keep it. The person who claims gets National Insurance credits that count towards their State Pension.

High Income Child Benefit Charge

If either parent earns over £60,000, some or all of the Child Benefit is clawed back through the High Income Child Benefit Charge. Above £80,000, it’s 100% clawed back.[2] The charge is collected through Self Assessment, so you may need to file a tax return online.

See our full guide: High Income Child Benefit Charge.

Childcare Support

The main childcare tax benefit is Tax-Free Childcare: the government tops up your childcare payments by 20%, up to £2,000 per child per year.[3]

See our full guide: Tax-Free Childcare.

Maternity & Paternity Pay

Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), and Shared Parental Pay are all taxable income. Your employer deducts tax and NI through PAYE as normal.[4][5]

Maternity Allowance (for those not eligible for SMP) is not taxable.

National Insurance Credits

If you’re not working while caring for a child under 12, you can get NI credits through Child Benefit to protect your State Pension entitlement. This is another reason to claim Child Benefit even if the HICBC applies.[1]

Guardian’s Allowance

If you’re raising a child whose parents have died, you may qualify for Guardian’s Allowance (£22.10/week in 2025/26) on top of Child Benefit. It’s tax-free.

Frequently Asked Questions

How much is Child Benefit in 2025/26?

Child Benefit is £26.05 per week (£1,354.60 per year) for your eldest or only child, and £17.25 per week (£897.00 per year) for each additional child.

Should I claim Child Benefit if I earn over £60,000?

Yes. You should always claim Child Benefit even if the High Income Child Benefit Charge applies, because the claimant receives National Insurance credits that count towards their State Pension entitlement.

Is maternity pay taxable?

Statutory Maternity Pay, Statutory Paternity Pay, and Shared Parental Pay are all taxable income and your employer deducts tax and NI through PAYE. However, Maternity Allowance (for those not eligible for SMP) is not taxable.

What is Tax-Free Childcare?

Tax-Free Childcare is a government scheme where the government tops up your childcare payments by 20%, up to £2,000 per child per year. You pay into an online account and the government adds £2 for every £8 you pay in.

Further Reading

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Sources

  1. Child Benefit — GOV.UK
  2. High Income Child Benefit Charge — GOV.UK
  3. Tax-Free Childcare — GOV.UK
  4. Maternity Allowance — GOV.UK
  5. Shared Parental Leave and Pay — GOV.UK

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