In the latest case to consider the high income child benefit charge, the FTT concluded that the taxpayer did not have a reasonable excuse for notifying liability – Sharp v HMRC [2023] UKFTT 746 (TC). As HMRC had already given the maximum permitted reduction on the penalties imposed, the FTT confirmed the amounts assessed.
The taxpayer had relied on ignorance of the law, and the FTT did not find it an easy case to decide. In the end, however, the tribunal found that the taxpayer “ought reasonably to have become aware of his liability to HICBC” by the relevant date.
This case also touched on the concept of criminality for the purposes of the European Convention of Human Rights. It was not disputed that the imposition of penalties in the circumstances of this appeal was “criminal” for the purposes of the Convention. However, “ordinary” liabilities to tax are not criminal, and the FTT commented that the liability to HICBC was such an ordinary tax liability.
This is just the latest of many cases coming to the FTT in relation to the HICBC. See our analysis of the Simmonite case for a detailed discussion of some of the issues involved.
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08926.html
Related content from Claritax Books
Discovery Assessments, by tax barrister Keith Gordon, is a detailed, clearly written guide to the law and practice in this area. Based on the author’s personal involvement in many leading cases, the book contains much practical advice explaining when and how such assessments may be challenged.
