We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA
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.