Child benefit starts to be clawed back in households where one of the carers has income exceeding £50 000.
The benefit is clawed back in full where income exceeds £60 000. This is known as the high income child benefit charge and currently where it is payable it must be done through self assessment.
Marginal rate of tax
For individuals with income in the £50 000 to £60 000 band the marginal rate of tax on additional income is 40% plus 1% of the child benefit for every extra £100 of extra income.
For a family with two children this equates to a marginal tax rate of 61%. For a family with three children this equates to a marginal tax rate of 69%.
Equalising income between carers will help as clawback is based solely on the income of the higher-earning carer (not on...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.