More families are being quietly pulled into an unpopular tax charge as pay rises collide with frozen thresholds, leaving many worse off without realising why.
New figures suggest the problem is set to intensify over the next few years.
Around 35,000 additional families will find themselves liable for the high income child benefit charge over the coming three years as frozen tax thresholds continue to bite, according to HMRC projections obtained through a Freedom of Information request by wealth management firm Quilter.
The official forecasts reveal that the total number of households subject to the charge will climb from 324,000 in the 2025-26 tax year to 359,000 by 2028-29.
This increase stems from fiscal drag, where rising wages push more earners above static tax thresholds without any genuine improvement in their purchasing power.
The Labour Government has abandoned Conservative proposals to overhaul the controversial system, leaving families increasingly exposed to what critics describe as a stealth tax on working parents.
Under current rules, the charge applies when the highest earner in a household has an adjusted net income exceeding £60,000, with clawbacks calculated at one per cent of child benefit for every £200 earned above this threshold.
Full repayment becomes mandatory once income reaches £80,000.
The majority of newly affected families are expected to fall within the tapering bracket, earning between £60,000 and £80,000.
HMRC estimates indicate 213,000 families will occupy this partial liability range in 2025-26, increasing to 246,000 by 2028-29.
HMRC estimates indicate 213,000 families will occupy this partial liability range in 2025-26, increasing to 246,000 by 2028-29
| GETTYMeanwhile, roughly 111,000 households will be required to repay their entire child benefit entitlement each year.
The £60,000 threshold was last adjusted in 2024 when then-Chancellor Jeremy Hunt raised it from £50,000, but no further increases are planned.
The system has faced sustained criticism since its introduction over a decade ago for disproportionately penalising single-parent households.
A family with two earners each bringing in £59,000 annually, totalling £118,000, retains full child benefit, whereas a lone parent earning just £60,000 faces partial or complete withdrawal of support.
Analysts are sounding the alarm over a little-known "tax trap"
| GETTYShaun Moore, tax and financial planning expert at Quilter, said: "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."
Quilter noted that families may experience no real-terms improvement in their financial position yet still see government support withdrawn as nominal incomes drift upward against unchanged thresholds.
Jeremy Hunt had committed to fundamentally reforming the charge and consulting on a shift to household-based income assessment by 2026, but the Labour Government has set aside these proposals.
Roughly 111,000 households will be required to repay their entire child benefit entitlement each year
| GETTYA Government spokesperson defended the current approach, stating: "The high income child benefit charge helps to ensure the sustainability of the public finances and protect and fund our vital public services."
The spokesperson highlighted alternative family support measures, including expanded government-funded childcare, 3,000 new nursery places through primary school upgrades, and free breakfast clubs for primary-aged pupils.
Mr Moore raised concerns that HMRC holds no data on how many taxpayers earning above £100,000 have children, meaning policymakers lack complete visibility of who faces these financial cliff edges.
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