Budget: High Income Child Benefit Charge threshold increased from £50,000 to £60,000

[MidnightPatrol]

"Hunt says 500,00 families will gain almost £1,300 from increase in high income threshold for child benefit

Hunt says he will change the way child benefit is paid.

At the moment the high income threshold applies to individuals, not households. That will change, he says.

And he says he is also increasing the higher income threshold. It will go up from £50,000 to £60,000.

He claims that almost half a million families will gain by almost £1,300."

There's no cap on number of children for CB. That's partly why the tax charge is especially punitive for those people who have more than 2 children and can mean earning more really isn't worth that much - if you have 3 children you will lose £3k in CB tax alone by earning £60k instead of £50k. Almost £4k if you have 4 children etc. Add other taxes, loan repayments and childcare costs and it becomes punitive to work more hours / FT.

The 2 child cap is related to universal credit and tax credits.

That's only next month

It was a shitty policy and now they don't have to fund it post the next election they are changing it. Pisstakers

Yes, but I was hoping that it would apply to this financial year so I would not have to pay it all back for 2023-24 when I do self-assessment. 😢

The spring budget is always for the upcoming financial year

It used to be a universal benefit. We should return to that, especially in an era of falling birth rates.

That makes sense, but I'd never really thought about it before now.

could someone help me understand.

we just paid back our CB and I’ve stopped claiming as 22/23 dh earned 62k, it will be roughly the same this year, does that mean we pay it all back again as I only stopped claiming in Jan? Or does this change things and it’s worth my claiming again?

for reference I earn about 55/57 (bonus dependent) dh earns between 62/65 bonus depending

It's worth claiming again yes, from April. You may not even have to do self assessment next year if your net adjusted incomes are below £60k (broadly speaking, that's gross income minus pension contributions).

And yes, if you claimed CB from April - Jan of this tax year, you will have to pay some or all of what you received back, by submitting a self assessment tax return this year.

Thanks lovely! Sorry coming back to you, why will I have to pay some or all over it back if the threshold has moved?

the pension thing caught me out before, I thought that got deducted so dh would’ve stayed in the 50/60 zone BUT apparently the defined workplace contribution scheme doesn’t affect the gross overall.

so now we know you won’t pay it back til you earn over 60k, but he earns over 60, so do we know how much we’ll pay back on a gross salary of 63 let’s say?

The threshold is only going to change from the tax year April 2024 - 2025 so no retrospective changes to this tax year I'm afraid.

They haven't made it exactly clear how it will taper from £60-80k but at a guess I would estimate you will pay back 15% of it for that £3k over the threshold. Pension is definitely deducted from gross income in the calculation, always. But some employers already let HMRC know about pension contributions when they send them info for PAYE, so what you see in PAYE can be closer to adjusted net than gross. I think that may have confused you. If you're not sure, do a self assessment and it will come out in the wash.

Ah the swines lol. But worthwhile claiming again from April and then using whatever comes in to pay last years back

i don’t really know but DH did a self assessment return and it put his earning at 62/3 and we had to pay it all back, oddly he’d not paid enough student Loan either. He can’t have ballsed that up surely?

Wouldn't it be better to get rid of CB and come up with something simpler to help parents (I don't know what)?

I agree, I think the household income stuff is up in the air. The Tories are unlikely to have enough time both to hold and implement a consultation on this, even if they stay until next January.

However, I'd assume Labour will have to keep the increased thresholds. It's a politically and practically sensible decision and would be stupid to reverse it back to the current mess. Of course, when they were last in we had universal CB anyway.

For me this will make a massive difference as with the cost of living increasing I have been looking to secure a better paid role (I'm a single parent and all the expenses for me and 2 kids - a lot of financial pressure!) but I've been hesitating on applying for roles without at least a 10k increase due to losing child benefit. Instead I'd accepted having to pay more into my pension to keep hold of the CB, even though real money now would help massively.

The existing system is unfairly biased towards two income households, yet housing and children costs aren't cheaper because I'm not part of a couple. I don't get discount on my mortgage for example. The cost of feeding an extra adult and maybe a car for them would be the additional costs, versus getting a whole additional salary!

The new way seems to be a much fairer approach.

It’s great for my household as we each earn around £55k but means we’ll probably lose all of it when it moves to combined household in two years time. Still, full child benefit for two children for two years will be nice.

The other reason to claim CB, and go through the self assessment palava, even if you are over the threshold is in case your earning suddenly changes. DH earns nearly £60k so it's barely worth doing it... unless something awful suddenly happened and he suddenly didn't earn over £50k that year. Then I'd be glad I'd claimed it for the year!

@junipuni that's why we are claiming still and doing self assessment. We are both now over the threshold so we have to pay it all back. But it makes sense to keep claiming because with bonus, we were going between £50-60k so it's not clear at the beginning of the year if we are going to be repaying in full. But with the freeze in the threshold, we are unlikely to go under £60k now.

Yes... If couples earning up to £160k joint are technically eligible for something, I wonder how many people would be considered unable to claim.

And what the cost of applying that would be, given it's based on household not single income.

Noone is unable to claim. You can register the claim, even above 80k income, and opt out of payments. The anomaly of individual limits vs, household income persists until or if the consultation resolves it. In the meantime there will be an election so this just curries favour with the squeezed middle short term, A new government may well just let the idea fade away or the complexities of implementing a household income limit be too complex to prove worthwhile.

I think it would make more sense to either scrap it and increase universal credit by an equivalent amount or make it completely universal again. This is just tinkering around the edges.

Selfishly, this is amazing for us as a family. I earn 63k and my husband earns 50k. I stopped reviving child benefit just 6 months ago because of going over the top of the threshold (after pension deductions). With it now not starting until 60k we will get 100% of the benefit, which is what, and extra £160ish a month. Personally very happy.

Silly question here as I opted out a while ago as over the threshold (and still will be) but my DH isn't- could/ should he be claiming CB instead of me or because I used to in the past, he can't now? He is actually the main carer anyway due to my work.

If you are still over the threshold regardless of which of you claims you would need to repay via a tax return.

He can claim but you’d still need to pay back the money

Typically as a father who has his three kids 46% I get fuck all