Spring Budget 2024 – High-Income Child Benefit Charge changes
The High Income Child Benefit Charge (HICBC) has attracted a lot of criticism since its introduction because it penalises couples that have a single high earner.
Currently, a couple where the two parents both earn £49,000 each are unaffected by the HICBC. However, another couple where one parent earns £60,000 while the other parent doesn’t work lose their entire child benefit amount.
To reduce this unfairness, in the Spring Budget the Chancellor increased the ‘high-income’ threshold from £50,000 to £60,000 with effect from 6th April 2024.
The HICBC will now also be calculated at 1% of the child benefit received for every £200 of income above the threshold. This is a slower rate of clawback than in the 2023/24 tax year and now means that child benefit is only fully clawed back where the income exceeds £80,000, rather than £60,000 in 2023/24.
This change means that many more couples will be able to keep their child benefit.
Jeremy Hunt also announced plans to change the HICBC so that it applies to household rather than individual income. This is expected to happen by April 2026, but cannot happen immediately as HMRC need to adjust their systems to allow them to look at household income.
You can see our Spring Budget Summary here.
Business News
We send regular updates that keep clients aware of changes and suggestions on a wide range of subjects; if you’d like to receive those too, just add your details below and we’ll do the rest! We promise not to bombard you and you can unsubscribe at any time.
