Child benefit: Jeremy Hunt raises income threshold for tax penalty

Under the current scheme, the child benefit received by those earning more than £50,000 a year is clawed back via the tax system on a sliding scale. Photograph: MBI/Alamy

Jeremy Hunt has finally bowed to pressure and conceded that a tax penalty affecting many higher-earning parents works in an unfair way and has led to some paying a marginal tax rate of 64%.

Announcing a shake-up of the controversial high-income child benefit charge, the chancellor said nearly half a million families would be better-off by an average of £1,260 in the year from April. For some the gain will be bigger, up to £2,212 a year for some parents with two children.