HMRC’s policy on high income child benefit charge penalties

The taxpayer did not realise he was liable to the high income child benefit charge for 2013-14 to 2015-16 until HMRC wrote alerting him to the fact in August 2018. He accepted the assessments but appealed against the penalties.

At the First-tier Tribunal hearing the taxpayer referred to HMRC’s guidance on high income child benefit charge penalty refunds and the circumstances when the department had cancelled the fines. These refunds were issued for the tax years 2013-14 2014-15 and 2015-16 and he noted that in other cases penalties have been cancelled and refunded when families made their claim for child benefit before the charge was introduced in 2013 - as in his case - and when one partner’s income later exceeded £50 000 in or after the 2013-14 tax year – also as in his case. He argued that because his income had increased to above £50 000...