Measure
The government will increase the High Income Child Benefit Charge (HICBC) threshold at which Child Benefit begins to be withdrawn from £50,000 to £60,000 from 6 April 2024. In addition, Child Benefit will not be fully withdrawn until individuals earn £80,000 or more, instead of £60,000 now. The charge is currently calculated as 1% of the Child Benefit payment made for each £100 of income above £50,000. From 6 April 2024, the charge will be calculated as 1% for each £200 of income above £60,000, thereby reducing the total effective tax rate for those affected by the charge.
The government is also planning to administer the HICBC on a household rather than individual basis by April 2026; a consultation will follow on this.
Individuals who have income between £50,000 and £80,000 and are eligible to claim Child Benefit.
The individual threshold will increase from 6 April 2024.
The change for the HICBC to be administered on a household basis will apply from April 2026.
This measure will be welcomed by those in receipt of Child Benefit who previously had a HICBC but will now retain the Child Benefit. There was speculation that changes would be made to the provision of free childcare for those earning over £100,000, but there has been no announcement made on this.