Hundreds of thousands of families are poised to see significant financial relief, with some potentially benefiting by up to £3,000, in the 2024-25 tax year.
The government has acknowledged that a child benefit measure implemented 11 years ago has not been equitable, leading to this adjustment. Among a series of changes marking the start of the new tax year is a reduction in national insurance for employees, dropping to 8% from the previous 10%.
Laura Trott, the Chief Secretary to the Treasury, highlighted that the budgetary revisions signify the government's commitment to rectifying the inequities within the child benefit system.
In addition to elevating the threshold to £60,000 annually, the government has also halved the penalty rate, ensuring that individuals lose their entire child benefit entitlement only once they earn £80,000. Previously, those earning £60,000 forfeited their entire child benefit.
Furthermore, commencing April 6th, child benefit rates have witnessed an increase, rising from £24 to £25.60 per week for the eldest or only child, and from £15.90 to £16.95 weekly for each additional child. This translates to substantial gains for those earning £60,000 with two children, amounting to £2,212 in the upcoming tax year. For individuals with three children, the potential gain escalates to £3,094.
Approximately 170,000 families with children will no longer be subject to the charge, while nearly 500,000 families stand to save an average of approximately £1,300 each during the 2024-25 fiscal year, as outlined by Trott.
