How A Small Pay Rise Can Mean Your Tax Rate Jumps To More Than 100pc telegraph.co.uk

A quirk of the tax system coupled with changes announced in last month’s Budget means that middle-class parents could pay more than 100p in tax on each pound earned.

Since 2013, if either one of a couple is paid £50,000 or more, they begin to lose child benefit at a rate of 1pc for every £100 of income.

The threshold for this “high income benefit charge” has been frozen ever since. But in April 2019 the higher-rate tax threshold will rise, also to £50,000. As a result, people who get pay rises that take them above £50,000 a year are hit with a double whammy of extra income tax and the loss of child benefit, which can be viewed as an additional tax.