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
Tel: +44 (0) 207 694 8773
Mark Hamilton, KPMG Corporate Communications
Mobile: 07785 337672
mark.hamilton@kpmg.co.uk
About KPMG:
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
