| answer text |
<p>The High Income Child Benefit Charge (HICBC) is a tax charge which applies to anyone
with an income of over £50,000 who gets Child Benefit, or whose partner receives it.
The charge increases gradually for those with incomes between £50,000 and £60,000
and is equal to one per cent of a family’s Child Benefit for every extra £100 of income
that is over £50,000 each year. Where income exceeds £60,000, the tax charge is equal
to the amount payable in Child Benefit. HICBC is calculated on an individual rather
than a household basis, in line with other income tax policy.</p><p> </p><p>Basing
HICBC on household incomes would mean finding out the incomes of everyone in each
of the 7.7 million households currently registered for Child Benefit. This would effectively
introduce a new means test, which would be costly to administer and create burdens
on the majority of families who receive Child Benefit. The Government decided that
charging HICBC to those on higher incomes ensures that everyone makes a fair contribution,
while those with the lowest incomes continue to be supported.</p><p> </p><p>The Government
set the HICBC thresholds at these levels to help target public expenditure in the
way it considered most effective. As with all elements of tax policy, the Government
keeps this under review as part of the annual Budget process.</p>
|
|
