Tag: Hicbc - Tax Policy Associates

Posts tagged "Hicbc"

Jun 6, 2024 Analysis

The Tories’ accidental 70% tax on people earning £120k

The Conservative Party has just proposed moving the point at which child benefit is phased out from income of £60k to £120k. This will greatly reduce the marginal rate for parents earning £60-80k. But it means that a parent earning £120k who has three children will face a 70% marginal rate. And they’ll face a […]

Marginal tax rate on next £ (IT, employee NICs and child benefit charge)

20%

70%

60%

50%

40%

30%

20%

10%

£0

UK marginal tax rate for single earner, family of 3 kids

£20,000

£40,000

£60,000 £80,000 £100,000 £120,000
Gross salary (single earner in household with three children}

£140,000

£160,000

£180,000

Nov 20, 2023 Analysis

What’s worse than a 71% marginal tax rate? Penalising 19,000 people who don’t understand it.

The UK’s high marginal tax rates on people earning £50k are a disincentive to work. They’re made worse by the way a large chunk of the tax is collected – the “high income child benefit charge” (HICBC). The HICBC creates a “tax trap” for employees who usually wouldn’t file a tax return. If they earn […]