Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate his Department has made of the number of families who will see reductions in their child benefit allowance as a result of rising inflation causing wages to rise and the government freezing the higher rate tax limit.

Child Benefit is a universal benefit payable to families as a contribution towards the costs of raising a child or children. Entitlement to Child Benefit is dependent on a person making a claim for it, and it is not means-tested.

The High Income Child Benefit Charge (HICBC) is a tax charge which applies to anyone with an income of over £50,000 who gets Child Benefit, or whose partner gets it. The charge increases gradually for those with incomes between £50,000 and £60,000, and is equal to one per cent of a family’s Child Benefit for every extra £100 of income that is over £50,000 each year. Where income exceeds £60,000, the tax charge is equal to the amount payable in Child Benefit. The HICBC threshold is not linked to the Income Tax higher rate threshold.

The Government set the HICBC thresholds at these levels to help target public expenditure in the way it considered most effective. As with all elements of tax policy, the Government keeps this under review as part of the annual Budget process.

HM Revenue and Customs publish annual updates on the numbers of families impacted by HICBC, which can be found at: https://www.gov.uk/government/publications/high-income-child-benefit-charge-data/high-income-child-benefit-charge.