The High Income Child Benefit Charge
The High Income Child Benefit Charge provides for Child Benefit to be clawed back through the tax system from families where the highest earner has an income in excess of £50,000.

Looks at the lifetime and annual allowance - which limit the amount that can be saved tax-free in a pension over a lifetime and over a year - and the reductions in those allowance since 2012
Pension tax relief - the annual and lifetime allowances (1 MB , PDF)
Pension tax relief works on the principle that contributions made to someone’s pension fund are exempt from tax, while the income paid out from the fund is liable to tax. Pension contributions made by individual employees are usually paid out of pre-tax salary, so tax relief is received at the individual’s marginal tax rate. The main limits that apply are the lifetime allowance (LTA) and annual allowance (AA). At introduction in 2006, the AA was set at £215,000 and the LTA at £1.5 million (Finance Act 2004, s218 and 228). Both were set to increase in stages, with the LTA reaching £1.8m and the AA £255,000 by 2010 (Budget 2004, para 5.45). However, since 2010, both allowances have been reduced:
Since 2016/17, the cost of pension tax relief as a proportion of GDP has remained broadly flat. Auto-enrolment, which saw approximately 10 million people brought into pension savings via their employer, placed an upward pressure on costs. Restrictions to pensions tax relief for higher earners – through the annual allowance, tapered annual allowance and lifetime allowance – is reflected in the downward shift from 2015-16 to 2016-17. (HMRC, Estimated cost of tax reliefs, 30 October 2020, p23).
However, commentators in the pensions industry have expressed concern about the impact of repeated changes in the AA and LTA on the complexity of the system and people’s capacity and confidence to plan for retirement (see Budget responses from ABI; PLSA; ACA, 3 March 2021).
Concerns about the impact of the tapered annual allowance on some higher earning public servants, in particular senior NHS clinicians, and the changes made in Budget 2020, are discussed in more detail in Pension tax rules – impact on senior NHS clinicians and GPs, Library Briefing Paper, Commons Library Briefing Paper, CBP 8626, March 2020.
The debate on wider reforms and information on the cost and distribution of pension tax relief is in Library Briefing Paper CBP 7505 Reform of pension tax relief
Pension tax relief - the annual and lifetime allowances (1 MB , PDF)
The High Income Child Benefit Charge provides for Child Benefit to be clawed back through the tax system from families where the highest earner has an income in excess of £50,000.
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