Christopher Diball v The Commissioners for HMRC
[2023] UKFTT 657 (TC)
Benjamin Redgraves v The Commissioners for HMRC
28 July 2023
[2023] UKFTT 658 (TC)
First-tier Tribunal
Mr. Redgraves didn't tell the taxman about owing money from child benefit. The taxman fined him. Mr. Redgraves said he didn't know he owed the money, but the judge said that wasn't a good enough excuse, so he still has to pay the fine.
Key Facts
- •Mr. Redgraves failed to notify HMRC of his liability to the Higher Income Child Benefit Charge (HICBC) for tax years 2015/16 to 2019/20.
- •HMRC assessed penalties totaling £698.80.
- •Mr. Redgraves argued he had a reasonable excuse due to lack of awareness of the HICBC and non-receipt of HMRC nudge letters.
- •HMRC claimed Mr. Redgraves was liable due to his income exceeding the threshold and that the child benefit forms contained information about HICBC.
- •HMRC sent nudge letters in November and December 2019, which Mr. Redgraves claimed not to have received.
Legal Principles
Obligation to notify tax liability
Taxes Management Act 1970 (TMA 1970), section 7
Penalties for failure to notify
Schedule 41 to Finance Act 2008
Higher Income Child Benefit Charge (HICBC)
Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), section 681B; Schedule 41 to Finance Act 2008
Reasonable excuse for failure to notify
Schedule 41 to Finance Act 2008, paragraph 20; Christine Perrin v HMRC [2018] UKUT 0156
Assessing penalties based on potential lost revenue
Robertson v HMRC [2019] UKUT 0202; Lau v HMRC [2018] UKFTT 230
Outcomes
Appeal dismissed; penalties upheld.
The Tribunal found the penalty assessments were validly raised. Mr. Redgraves failed to demonstrate a reasonable excuse under the four-step test in Perrin, despite not receiving the nudge letters. His lack of complete knowledge of the HICBC threshold and calculations was not considered an objectively reasonable excuse.