In another case considering the high income child benefit charge, the FTT concluded that the taxpayer did have a reasonable excuse for notifying liability – Chattaway v HMRC [2023] UKFTT 752 (TC). The charge itself was upheld but the appeal against the penalties was allowed.
In relation to the question of reasonable excuse, the FTT commented as follows:
“The unchallenged evidence in this case is that even if the appellant had received and read the SA 252, he would not have considered relevant to him since his income is less than £50,000 at that time. This is a wholly rational position. And whilst the appellant was clearly on notice of the existence of the HICBC with effect from August 2013, he was still ignorant of the way in which benefits were taken into account when calculating adjusted net income. It is ignorance of this facet of the law, rather than of the charge itself, which provides the appellant with a reasonable excuse in this case.
That ignorance would have ceased had he received the nudge letter. He did not. So his ignorance did not actually cease until he received the letter of 8 March 2021. He responded to that letter with commendable alacrity and without unreasonable delay.”
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/TC08932.pdf
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.
