Andrew Newall v The Commissioners for HMRC
[2024] UKFTT 47 (TC)
Douglas Lakeland v The Commissioners for HMRC
16 November 2023
[2023] UKFTT 978 (TC)
First-tier Tribunal
A couple didn't know about a tax charge related to child benefit and high income. The court decided they weren't at fault for not paying it earlier because they didn't receive important letters and weren't aware of the benefit claim. They only had to pay for the most recent year, not the previous ones, and they didn't have to pay a penalty.
Key Facts
- •Appeal against High Income Child Benefit Charge (HICBC) assessments for 2012/13 to 2017/18 and 2019/20, and a penalty for failing to notify.
- •Appellant's wife claimed child benefit since 2001; appellant was an employee with PAYE income.
- •Appellant claimed he did not receive HMRC's SA 252 letter (2013) or 'nudge' letter (2021).
- •HMRC discovered tax insufficiency on 17 June 2021.
- •Assessments issued on 6 July 2022; appeals lodged.
- •Appellant argued unfairness of HICBC legislation.
- •Appellant argued reasonable excuse for non-notification.
Legal Principles
Validity of discovery assessments under s29 TMA, amended by s97 Finance Act 2022.
Taxes Management Act 1970 (TMA), Finance Act 2022
Reasonable excuse for failure to notify under s118(2) TMA; objective test considering taxpayer's attributes and circumstances.
Taxes Management Act 1970 (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
Penalty for failure to notify under Schedule 41 Finance Act 2008; reasonable excuse defence.
Schedule 41 Finance Act 2008
Service of documents; deemed service by properly addressing, pre-paying, and posting.
Section 7 Interpretation Act 1978
Outcomes
Appeal against HICBC assessment for 2019/20 dismissed.
Assessment made within four-year time limit; no reasonable excuse after 18 June 2021.
Appeals against assessments for earlier years and penalty allowed.
Assessments invalid as made more than four years after the end of the relevant tax years due to reasonable excuse for non-notification until 18 June 2021.