Comment by alias_neo

Yes, I think you're spot on there.

You also don't have childcare costs once they go to school, so the loss of that outgoing makes up for the loss of the tax credit.

I'm also liberal, and I think that everyone should be given the child tax credit, if the government wants you to work, and earn, and have children (it does), the tax credit is an effective way to help everyone work harder and earn more.

The issue I've been trying to describe, is that after you've already had children, and you then hit 100k, you lose it entirely, making you 2k per child worse off, so let's say you get to 100k, and you already have two children in childcare, you lose 4k, then you get a pay rise to 110k, with the loss of the 4k and at the same time you also hit a marginal tax rate of 60%, you now earn exactly the same as you did at 100k.

If you got a with-inflation pay rise every year from 100k onward, you'd be earning less for almost all of that time until those children go to school.

Lowering the higher band threshold to 100k from 125k and not tapering the personal allowance would actually leave you better off.

EDIT: Typo in my numbers (100k > 110k).