High income child benefit charge.

clt1979

Hi, people keep saying the inheritance tax is the most hated in the UK although few are affected by it. What I can’t stand and want to no is, if/when the high income child benefit charge working out will change. How is it fair that with me earning over 60k and my wife 13k (£73k total) I have to pay the full amount back (over 2k).
Yet my friends (husband and wife) both earn just short of 50k each (nearly 100k total) and get the full amount. What a joke. So they are already 27k better off through their earnings and with this crappy tax they end up 29k better off. How is this fair? Surely it should be based on household/family income? I’m also aware of pension contributions helping to lower income etc but it still sucks.

Upcycling_Queen

It’s not very fair at all. Two people on less that 49k still get it. But if you are the main breadwinner, you don’t and if your wife is a SAHM she should still claim, but don’t accept payment. 

I didn’t know this. I stopped it years ago as it was a pain doing the tax return. I’ve not worked for a year and didn’t realise I could have opted in for that time and had NI paid. Grrrrrrrrrrr

sheramber

Unlikely to change any time soon.

Debated February 2023

https://hansard.parliament.uk/commons/2023-02-02/debates/0D9BCE1C-7045-4F71-BDD5-E4597555A09D/HighIncomeChildBenefitCharge

Question put and agreed to.

Resolved,

That this House has considered the High Income Child Benefit Charge.

Lorian

Consider paying more into your pension to avoid it as its based on your net adjusted pay. 

MattMattMattUK

clt1979 said:

Hi, people keep saying the inheritance tax is the most hated in the UK although few are affected by it.

It is, consistently, because the vast majority, somewhere between 80-95% depending on how the questions is asked, thing it is inherently unfair.

clt1979 said:

What I can’t stand and want to no is, if/when the high income child benefit charge working out will change. 

I would be fairly certain that the answer to "if" is no.

clt1979 said:

How is it fair that with me earning over 60k and my wife 13k (£73k total) I have to pay the full amount back (over 2k).
Yet my friends (husband and wife) both earn just short of 50k each (nearly 100k total) and get the full amount. What a joke. So they are already 27k better off through their earnings and with this crappy tax they end up 29k better off. How is this fair? Surely it should be based on household/family income? I’m also aware of pension contributions helping to lower income etc but it still sucks.

Fairness is subjective, one could ask how is it "fair" that childless people pay additional taxes to have that money transferred directly to people who have children? That being said I can see a level of unfairness in the way the system is applied, but it was chosen for simplicity, minimal cost of administration and a financial saving for the government, a more complicated household income system would have cost a lot more to administer. Child benefit is an inherently irrational tax in the first place and should be abolished. 

sheramber

Hihg income charge was a compromise  by George Osborne, after  he wanted to abolish child benefit.

andy26599

I have 3 children of my own, my ex wife claims the child benefit for those, and both of them are under the £50k brackets. I earn over £60k, and my wife's 2 children live with us (we moved in together in January this year and my P60 value for 22/23 was £55k) meaning I have to pay back money that my wife received for her children. Next tax year, it will be £2,074 if my wife continues to claim it. 

My wife uses the money to add to the children's Junior ISA. Would it be allowed for us to stop the claim, and for her ex partner to start a claim (as both him and his wife earn less than £50k), and to then pay the money directly in to the ISA as my wife does?

Albermarle

It is, consistently, because the vast majority, somewhere between 80-95% depending on how the questions is asked, thing it is inherently unfair.

Probably because people think they will end up paying IHT, when in fact they will not.

andy26599

clt1979 said:

Hi, people keep saying the inheritance tax is the most hated in the UK although few are affected by it. What I can’t stand and want to no is, if/when the high income child benefit charge working out will change. How is it fair that with me earning over 60k and my wife 13k (£73k total) I have to pay the full amount back (over 2k).
Yet my friends (husband and wife) both earn just short of 50k each (nearly 100k total) and get the full amount. What a joke. So they are already 27k better off through their earnings and with this crappy tax they end up 29k better off. How is this fair? Surely it should be based on household/family income? I’m also aware of pension contributions helping to lower income etc but it still sucks.

It's daft. I'm now effectively paying more towards my step kids (not including my contribution to their home, food, etc) than their father does in child maintenance if my wife chooses to continue receiving the benefit.

I also pay child maintenance to my ex wife for my own children, and takes no account of my actual disposable income and outgoings. 

LightFlare

The whole concept of child benefit should be scrapped imo.

Its an antiquated benefit that is no longer relevant