According to the current system, parents or a parent’s partner who earns more than £60,000 are required to pay the high income child benefit tax levy and will no longer receive the benefit when their salary reaches £80,000.
However, should the Conservatives win on July 4th, they intend to raise the threshold to £120,000 prior to paying any taxes and to £160,000 prior to the benefit being removed. Additionally, they intend to base it on household income rather than an individual’s.
According to Chancellor Jeremy Hunt, the plan would result in an average tax decrease of £1,500 for about 700,000 people.
This would “boost families’ financial security and give them more money to spend on the things that matter most”.
However, Labour termed it “another chaotic scattergun announcement from Rishi Sunak, adding to his list of desperate and unfunded policies that he knows can’t be delivered” .
The government’s most recent action comes after it decided in April to increase the £50,000 threshold to £60,000 as the point at which the high income child benefit tax levy becomes applicable.
