Richard Chattaway v The Commissioners for HMRC
[2023] UKFTT 752 (TC)
Darren Dunckley v The Commissioners for HMRC
10 August 2023
[2023] UKFTT 707 (TC)
First-tier Tribunal
Someone was charged extra tax for child benefit because they earned over £50,000. They said they never got the letters telling them about the extra tax, so the judge said they didn't have to pay the extra penalty, even though they still owed the original tax.
Key Facts
- •Appellant assessed to High Income Child Benefit Charge (HICBC) for 2018/19 (£1,788) and penalty for failing to notify (£482.76).
- •Appellant's income exceeded £50,000.
- •Appellant received no specific notification of HICBC liability until a 'nudge' letter in November 2019, which he claims not to have received.
- •HMRC's discovery assessment was made on 11 March 2021.
- •Appellant appealed against both assessment and penalty on 1 July 2021.
Legal Principles
Liability for HICBC
Section 681B Income Tax (Earnings and Pensions) Act 2003
HMRC's discovery assessment powers
Section 29 TMA, amended by Section 97 Finance Act 2022
Penalty for failure to notify
Schedule 41 Finance Act 2008
Reasonable excuse for failure to notify
Section 118(2) TMA, Christine Perrin v HMRC [2018] UKUT 156, The Clean Car Co Ltd v C&E Commissioners [1991] VATTR 234, William Archer v HMRC [2023] EWCA Civ 626
Service of documents
Section 7 Interpretation Act 1978
Outcomes
Appeal against HICBC dismissed.
Valid and timely discovery assessment; appellant's income exceeded £50,000; appeal not made before 30 June 2021 to qualify for protection under Section 97 FA 2022.
Appeal against penalty allowed.
Appellant had a reasonable excuse for not notifying due to non-receipt of nudge letter and subsequent letters; acted promptly upon discovering liability.