Spring Budget 2024 announces changes to the High Income Child Benefit Charge thresholds

Chancellor Jeremy Hunt announced in the Spring Budget on 6 March 2024 that the High Income Child Benefit Charge thresholds would rise from April 2024. The base threshold at which the charge begins increases from £50,000 to £60,000, and the upper threshold at which Child Benefit is taxed away in full rises from £60,000 to £80,000¹.

The charge applies where either partner individually has taxable income above the threshold; joint income is not counted, so a couple each earning £59,000 is not affected². Under the previous rules, the charge equated to 1% of Child Benefit paid for every £100 of income between £50,000 and £60,000¹. From April 2024, the charge equates to 1% of Child Benefit for every £200 of income between £60,000 and £80,000, so an income of £70,000 incurs a charge of 50% of Child Benefit¹.

According to Mr Hunt, the change should save approximately half a million families an average of £1,300 a year and take around 170,000 families out of paying the charge altogether¹. The Resolution Foundation put the gain at an average of £1,260 each for almost half a million families, and said the move "halved the rate of that taper"³. Which? reported that had the threshold risen with average wages since its introduction, it would be £71,774¹.

Child Benefit rates for 2024-25 are unchanged by the Budget¹:

The Budget also announced a consultation on moving the charge to a household-based system, to be introduced by April 2026¹. Entitledto reported that the Chancellor had asked HMRC to "go further and move to a household basis for assessing income", and that the government would set out "in due course" how employed customers could pay through their tax code without registering for Self Assessment⁴. It noted the decision would fall to a future Chancellor, and that a cost-neutral household system would mean a start point for couples at a joint income of around £86,000, bringing around half a million two-earner couples into the charge for the first time⁴.

Why it matters for households

From April 2024, households where the higher-earning partner has taxable income below £60,000 no longer pay the charge at all, and those with income between £60,000 and £80,000 pay a reduced amount¹. Entitledto states that people with income between £60,000 and £80,000 are better off claiming Child Benefit and paying the charge than not claiming it, and that anyone with income over £80,000 faces a charge equal to 100% of their Child Benefit². Claiming Child Benefit, even where no payment is received, can qualify the claimant for National Insurance credits that protect State Pension entitlement².

The Resolution Foundation said the Budget left workers on middle and slightly higher earnings, £26,000 to £60,000, the net winners by 2027-28, while taxpayers earning £19,000 or less are worse off once threshold freezes are counted³. It also said the Budget pencilled in a 13 per cent real per-capita fall in day-to-day spending for unprotected departments between 2024-25 and 2028-29, equivalent to cuts of £19 billion³.

What happens next

The threshold changes take effect from April 2024¹. The consultation on a household-based system is intended to lead to introduction by April 2026¹. Entitledto reports that the move to a household basis for income assessment was stated to occur in April 2026, but that the decision will fall to the next Chancellor⁴. Details of how employed customers will pay the charge through their tax code, without registering for Self Assessment, have not yet been published⁴.