Wednesday 21 March 2012
The Chancellor removed the ‘cliff edge’ in withdrawing child benefit in today’s Budget - but smoothing its withdrawal for those with incomes over £50,000 has left some anomalies between single earning and multiple earning households, according to KPMG. Dealing with these would have required the introduction of a system outside of self assessment which is likely to have cost more than it would save.
David Kilshaw tax partner at KPMG, said: “The changes announced today will be a welcome relief for those earning between £42,000 - £50,000 as they have retained their entitlement to child benefit.
However, the Chancellor has retained a 50% income tax rate – just for families earning between £50,000 - £60,000 with children rather than for those earning over £150,000. The 40% tax rate they pay combined with the £10 child benefit loss per £100 earned over £50,000 adds up to a 50% marginal tax rate.”
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For further information please contact:
KPMG Press office
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Mark Hamilton, KPMG Corporate Communications
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