Taxpayer sold house to pay disputed tax

The taxpayer was assessed to the high-income child benefit charge (HICBC) for the years 2012-13 to 2018-19. The assessments totalled £15 374. HMRC also imposed penalties of £4 150.98 for his failure to notify his liability to the charge. The overall total was thus £19 524.98.

Before the hearing HMRC agreed with the taxpayer’s representative that the penalties were too high and reduced them to £3 074.80. The 2012-13 assessment and related penalty were cancelled.

The First-tier Tribunal found the taxpayer had a reasonable excuse for failing to notify his liability to the HICBC and cancelled the penalties. In essence the judge agreed that even though the taxpayer saw the initial publicity about the charge his income was at the time well below the threshold and a ‘reasonable taxpayer’ would not keep information about a charge that was irrelevant to him. On the fact that he...