Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential cost to the public purse of abolishing the (a) High Income Child Benefit Charge and (b) reductions in the level of Personal Allowance for people earning over (i) £100,00 and (ii) £125,000.
The Government is committed to managing the public finances responsibly. The High Income Child Benefit Charge ensures that the Government supports the majority of families while keeping welfare expenditure sustainable.
Data showing tax revenue raised by the High Income Child Benefit Charge in each financial year is published within Table 1 of HMRC’s Child Benefit statistics.
For individuals with income above £100,000, the Personal Allowance is withdrawn gradually, with £1 of allowance lost for every £2 of income above the income limit of £100,000. This reduction continues until the Personal Allowance is completely withdrawn for those with incomes above £125,140.
The total income tax liability for those earning above £100,000 is published online in Table 2.5 of HMRC’s income tax liabilities statistics. For the 2024-25 tax year, this is estimated at £145 billion, almost half of the estimated income tax revenue for this year.
As with all aspects of the tax system, the Government keeps the withdrawal of the Personal Allowance and the High Income Child Benefit Charge under review and any decisions on future changes will be taken by the Chancellor in the context of the wider public finances.