High income child benefit charge was not income to be discovered

HMRC assessed the taxpayer to the high income child benefit charge (HICBC) under the discovery provisions (TMA 1970 s 29(1)(a)) for the years 2014-15 to 2016-17. In that period his wife had claimed child benefit and his income exceeded £50 000 in each year but he had not submitted a self-assessment tax return or been issued with a notice to file. He was not charged a failure to notify penalty because HMRC considered he had a reasonable excuse.

The taxpayer appealed against the assessments. The First-tier Tribunal decided that although he was liable to the charge and HMRC had made a discovery the assessments were not validly raised. The officer had not discovered any ‘income which ought to have been assessed to income tax’ within s 29(1)(a).

HMRC appealed.

On HMRC’s first ground of appeal - that on a purposive construction the word ‘income’ in s...