Tens of thousands more families are set to be pulled into the High Income Child Benefit Charge over the next three years as a result of fiscal drag.
A Freedom of Information request to HM Revenue & Customs by Quilter found the number of families liable for HICBC will rise from 324,000 in 2025-26 to 359,000 in 2028-29.
This projected increase of 35,000 reflects the drag of frozen tax thresholds and static benefit parameters against rising incomes, the wealth manager said.
Most affected families are expected to be in the tapering range of liability between £60,000 and £80,000.
According to HMRC’s data, 213,000 families will be in the HICBC taper in 2025-26, rising to 246,000 by 2028-29, while 111,000 families each year will be repaying Child Benefit in full.
However, the same freedom of information request also found that HMRC does not hold data on how many taxpayers who earn above £100,000 are responsible for children, limiting policymakers’ ability to understand the full impact of threshold freezes on family finances, says Quilter.
Shaun Moore, tax and financial planning expert at Quilter, said: “Our FOI shows that tens of thousands more families will be pulled into the High Income Child Benefit Charge over the coming years purely because frozen thresholds let inflation and nominal earnings shifts do the work of tax increases. Families may not be better off in real terms, but more and more of them will see support withdrawn as a result.
“The data shows that each successive year more parents will be subject to clawbacks of Child Benefit that eat into household budgets at a time when costs of living remain high.
“It is also worrying that HMRC cannot say how many higher earners have children, because it means the Government lacks full visibility of who faces these financial cliff edges. As more families cross into higher income brackets in name alone, policymakers are effectively taking a shot in the dark on a key piece of family finances.”
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