High income child benefit charge

[clifden1974]

https://petition.parliament.uk/petitions/652076
Please take the time to sign this petition to get the high income child benefit tax abolished

There are better adjustments than just scrapping an income limit entirely.

the marriage/partnership penalty should be eliminated.

there should be a phase-out of the benefit instead of a strict cutoff. As you earn additional money over the threshold, you should not end up losing money because of the loss of a benefit. A phase-out reduces the amount of the benefit as income rises, adjusts for taxation, and eventually reaches zero benefit. So at no point does a persons net position decrease just because they got a raise or a bonus.

its a basic concept of good tax and benefit policy because otherwise you create disincentives to work. Calculating the phase-out tables isn’t even that difficult.

All benefits should be means tested on HOUSEHOLD income.
All tax (and therefore tax free allowance) should be based on INDIVIDUAL income.

Simpler and fairer

I don’t disagree with a cap on principle but it should be per household.

Eg partner earns £55k, I’m on SMP.

Friends can’t understand how we don’t get any - they both earn between £45k and £50K, household income of £95k.

100% this.

Thanks to everyone for your replies and points of view.
My children were born before the introduction of the HICBC and before the banking fiasco of 2008.
When child benefit was a universal benefit , I think since the late 1940s.
The mismanagement of the banking sector lead to the many years of Austerity that you and I had to indur.
Years of pay freezes and pay cuts .
No investment in the infrastructure hospitals schools roads ( I won't include rail as we have Hs2 and new underground line in London)
No investment in the future .That's the children.
That was the reason for the HICBC .
Those that believe they don't need it .Then you don't need to claim for it,or donate it to charity. The choice will be yours ,but it will be your choice .
The title of this tax is meant to anchor your thinking, HIGH INCOME .
In 2023 to earn over the national average requires hard work, long hours and dedication.
Be under no illusion The Hicbc is a tax because I you fall foul of repaying it its the tax regulations that you will be pursued under .

I'm not opposed to there being an earnings cap on CB recipients, but there are three big problems with the current system:

1. As said above, the penalisation of single parents and the fact that the cap is set on individual not household income.

1. The ludicrous and completely counter initiative situation in that parents earning over the cap have to still claim child benefit but opt out of actually receiving the payments. There are likely to be many parents (mainly women) who are not receiving credits towards their state pension that they are entitled to, because they are not claiming to receive a benefit which they are not eligible for.

And 3. The fact that the earnings cap has not risen one iota since it was introduced 10 or so years ago. More than double the amount of parents are now subject to the cap now than when it was first introduced. This is fiscal drag at its worst.

For me the bigger issue is that it is based on single income va household income.

I would sooner target that for change

And I say this as a higher rate tax payer that does not qualify for CB and have not since the birth of my first (I have three)

Signed

For myself I hold to the belief that the design and implementation is fundamentally flawed .The founding principle was based on the conditions of the economy in 2012.
Therefore it should be struck down and a properly debated designed and implemented system be put in place

It’s a ridiculous system and particularly unfair to single parents who already pay a far higher percentage of their household income in taxation.
I suspect the costs of administering the system largely negates any savings. Not to mention that people can move salary around to avoid losing thechildbenefiteg by paying into a pension etc

And that would be great if it actually helped lower income families, but the way it's done, isn't fair... A family earning 99k between two adults would still receive it in full, a single parent, or a family with one stay at home parent/one low earner, with an income of 50k, start to get it taken away. So the "poorer" family don't get it, but the richer do. It's a very flawed benefit.

It should be based on household income and the threshold should be raised. How have they got away with keeping it the same for over 10 years. 50k back in 2013 is probably 70k now, if not more.

petition.parliament.uk/petitions/639443

This petition might be more what the majority are asking for - raising the threshold

@babyturtle19 - I've signed your petition / thanks.

I'm a single parent & it is so bloody unfair!

It should be household income, not individual- it really discriminates against lone parents.

Child benefit should be universal no matter your income .society needs to show that all are equal be you poor or wealthy.if you are wealthy then its your choice to recieve or donate the money.But you know your children are seen as equal to the children of less wealty people in the eyes of society.
Before anyone asks about the financial please remember that administrative burden of this tax means its virtually revenue neutral

I don't agree with you there, OP.

I don't think any benefits should be universal.

If for example you are earning 500k you shouldn't be getting any benefits.

I appreciate what your saying. The issue I have with excluding any part of our society is just that you exclude.
Yes there will be a number of people earning half a million a year.But they will also be paying a great deal of taxes.
The thread that joins a pauper to a Prince is the love of their children .
The proverb that it takes a village to raise a child is apt .
We need the very wealthy to see themselves as part of this village we call the UK.The ideology of excluding this sector of society by legislation is wrong.As said before the option of receiving or opting out or donating this benefit would be up to the individual

For me the main issue is and always has been that it was based on income rather then, household income and not one person salary.

If you have one person earning 60k and having to pay it back, then you shouldn't have two income families earning nearly 100k and still being able to claim child benefit and not pay it back.

You also now have the issue of tax bands not being moved for many years, so more people are being moved into the 50 - 60 threshold.

The coalition government followed by the Conservative government see the silent majority as a cash cow.
Looking to raise thresholds is us agreeing that the HICBC is yet another acceptable tax.
The Hmrc should focus their efforts on getting the taxes avoided by the corporations collected .
The administrative burden of the HICBC would be better employed on that rather than penalising Woking tax paying families .

In your example above OP with the SAHM and one high earner - that’s a choice. If that couple needed more money the wife could up her hours. Whereas two people earning full time £49k each are unlikely to be able to increase earning. I appreciate households where there is only one working is different but I hear this argument all the time with this benefit - 2 workers earning £49 k each versus one earning £60.

Comes back to why the HICBC was introduced. The government trying to save money by penalising families.
The HIcbc was introduced to deal with the banking crisis and has been kept on the books because us the tax payers are willing to accept it.
Rather than meekly agree to what is generally regarded as a seriously flawed system. That's from parliamentary debates held in 2019.
We need to say that we aren't the cash cows that we are seen as .
Instead we discuss ways to make it less unfair .
Tweeting the parameters of a flawed system is like rearranging deck chairs on the titanic.

Well TBF SAH is a choice, 2 DPs both WOH will have higher costs. As other's have said it penalises single parents.

I have never understood why terms for claiming Child Benefit have been so generous whilst Government attitudes to other benefits has been so Dickensian and punative. A friend of my Mum's got really crippling sanctions because he missed a benefits appointment when he fainted at home. He was living off the Foodbank for the next 3 weeks because he had no money coming in. Yet a comfortable, middle income family with two salaries coming in can claim child benefit. It's completely contradictory. We've never claimed it simply for the reason we don't need it. Feels morally wrong to take the money.

Bonkers suggestion! You really think the children of high earners need £21 a week in benefits so that they see themselves as equal to children from poorer households???

If you are a high earning household your kids are not equal to children in households claiming benefits. They are privileged. They are lucky. Why not teach your kids that??

Btw I agree that CB should be claimed according to household income and that the current system is shockingly discriminatory towards lone parents (women). I do not agree with universal monetary benefits

Prior to the introduction of the HICBC that was the case .
Then to plug the hole created by the bale out of the financial sector the cost was put onto the families of the country.
That's what needs to be remembered in this discussion.
The financial crisis is now a footnote in history .