Treasury written question – answered at on 15 March 2022.
To ask the Chancellor of the Exchequer, what assessment his Department has made of the impact of the High Income Child Benefit Charge (HICBC) threshold on families with one working parent on a low to average income in the context of recent increases in the cost of living.
The Government introduced the High Income Child Benefit Charge (HICBC) from January 2013 to ensure that support for families is targeted at those who need it most. The tax charge applies to anyone with an individual income over £50,000 who claims Child Benefit, or whose partner claims it, regardless of family make-up. The charge is tapered for taxpayers with incomes between £50,000 and £60,000. Where income is over £60,000, the amount of the charge is equal to the Child Benefit payments.
HICBC is calculated on an individual rather than household basis, in line with other income tax policy.
The Government set the HICBC thresholds at the current levels to help target Child Benefit in the way it considers most effective. As with all elements of tax policy, the Government keeps this under review as part of the annual Budget process.
The Government recognises the challenge that many are facing with the cost of living. That is why we are providing support worth over £20 billion across this financial year and next that will help families with the cost of living. This includes cutting the Universal Credit taper rate and increasing work allowances to make sure work pays, freezing alcohol and fuel duties to keep costs down, and the £9.1 billion package announced in February 2022 to help households with rising energy bills. In addition, we are increasing the National Living Wage by 6.6 per cent to £9.50 an hour in April 2022, which will benefit more than 2 million workers.
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