The high-income Child Benefit charge on income over £50,000 has been frozen since the policy was introduced in 2013. But according to Ms Guy, this threshold would now be around £65,000 if it had risen with inflation.
She continued: “Raising the basic tax threshold was a key policy of the coalition Government. The basic tax threshold was gradually raised from £6,475 in 2010/11 to £10,000 in 2014/15 and £12,500 in 2019/20.”
However, despite continuous wage growth, the basic tax threshold was set to remain at this rate for nine years (at the time of implementation) until 2028, with only a marginal £70 increase in the 2021/22 tax year.
Ms Guy said: “If you can afford it then the best way to avoid paying more tax is by paying more into your pension.
“Pension saving is tax-free in the UK, and the Government will top up your pension payments, so it only costs £80 to pay in £100 if you’re a basic rate taxpayer and £60 to pay in £100 if you’re a higher rate taxpayer.”
