The Tax Credits Act 2002 and the Social Security Administration Act 1992 place a statutory duty on His Majesty’s Treasury to review the rates of tax credits and child benefit each year in line with the general level of prices. There is a further statutory duty on the Treasury to increase guardian’s allowance in line with price growth. I have now concluded the review for the tax year 2023-24.
I have decided to increase tax credits and child benefit rates in line with the consumer price index (CPI) for the year to September 2022. Guardian’s allowance will also increase by the same rate. This means that:
The majority of elements and thresholds in working tax credit and child tax credit, including all disability elements, will increase by 10.1% from 6 April 2023. This means, for example, that the basic element of working tax credit will increase from £2,070 to £2,280 per year. In line with established practice and the Office for Budget Responsibility’s expectations in their welfare forecast, the maximum rate of the childcare element, the family element, the withdrawal rate and disregards in tax credits will remain unchanged.
All rates of child benefit, plus guardian’s allowance, will increase by 10.1 % from 10 April 2023. This means, for example, that the child benefit rate for the eldest child will increase from £21.80 to £24 per week.
The new rates will apply across the United Kingdom. I will deposit the full list of these rates in the Libraries of both Houses shortly.
[HCWS372]