Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate he has made of the number of people who will be required to pay the High Income Child Benefit Tax Charge in each of the next five years due to the the freeze in the income tax higher rate threshold.

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) was introduced in 2013 and 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. Individuals can also opt-out of getting Child Benefit payments and avoid paying HICBC. The HICBC thresholds are not linked to the Income Tax higher rate threshold or the personal allowance.

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.

The number of people who will be required to pay the High Income Child Benefit Tax Charge in future years will depend on many factors including the numbers of individuals who choose to opt-out of Child Benefit payments. Annual updates on the numbers of individuals who are liable to HICBC are published each Autumn at: https://www.gov.uk/government/publications/high-income-child-benefit-charge-data/high-income-child-benefit-charge.