High Income Child Benefit Tax Charge
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential merits of moving the High Income Child Benefit Charge from an individual to a household income basis.
Answered by Dan Tomlinson
The Government understands the concerns that have been raised about the High Income Child Benefit Charge and the £100,000 threshold for childcare. These are both calculated on an individual rather than a household basis, in line with other income tax policy. Applying them on a household basis while ensuring that no family lost out would come at a significant fiscal cost. However, the Government keeps all taxes under review as part of the policy making process.
More broadly, the UK's income tax system has been based on the principle of independent taxation since 1990. This means each individual is taxed on their personal income, rather than household income, and each has their own tax-free allowances and set of tax thresholds. The objective of independent taxation was to give married women the same privacy and independence of their tax affairs as everyone else, and it has brought an end to the ways in which the tax system previously penalised marriage.
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