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The government should raise the threshold for the high income child benefit charge to avoid it affecting basic-rate taxpayers for the first time in April, says the Low Incomes Tax Reform Group. Failure to do so would cause the charge to be contrary to the original policy intent to target higher-rate taxpayers only, and would cause difficulties in raising awareness about the charge among those who do not consider themselves on a high income.
The higher-rate threshold for 2021-22 is set to be £50,270 – exceeding for the first time the £50,000 threshold at which the charge begins to apply. LITRG suggests the government raise the £50,000 income threshold to at least £60,000. It is also calling for the point at which child benefit is fully clawed back to increase from £60,000 to £75,000.
