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Changes coming for parents earning £60,000 and above

The government will introduce legislation in the Spring Finance Bill 2024 to increase the High Income Child Benefit Charge (HICBC) adjusted net income starting threshold to £60,000, from the 2024-25 tax year onwards.

Currently the tax charge is tapered and increases gradually for those with income between £50,000 and £60,000. This is equal to 1% of a family’s child benefit for every £100 of income that exceeds £50,000 in a tax year, for the tax year 2023-24. Where income is above £60,000 the tax charge is equal to the total child benefit award.

Legislation will be introduced to amend section 681B to increase the HICBC starting threshold to £60,000.

It will also amend section 681C to extend the HICBC taper to between £60,000 and £80,000. For those with income between £60,000 and £80,000, the rate at which HICBC is charged is halved, and will equal 1% for every £200 of income that exceeds £60,000. The charge on taxpayers with income above £80,000 will be equal to the full amount of child benefit paid.

The amount of child benefit payable will be unaffected by these changes.