Key Facts
- •Jonathon Woods appealed against tax assessments and penalties related to the High Income Child Benefit Charge (HICBC) for tax years 2014/15 to 2019/20.
- •HMRC assessed Woods for HICBC liability and penalties for failure to notify.
- •The Tribunal determined as a preliminary issue whether the assessments were 'protected' under s97 of the Finance Act 2022.
- •The appeal was stayed pending the outcome of *Wilkes v HMRC*, which dealt with the validity of using discovery assessments for HICBC.
- •Section 97 FA 2022 amended the law on discovery assessments, impacting appeals filed before and after June 30, 2021.
- •The Tribunal considered whether Woods raised the issue of assessment invalidity (as per *Wilkes*) before June 30, 2021.
Legal Principles
Section 97 FA 2022 protects discovery assessments for HICBC unless an appeal raising the *Wilkes* issue (invalidity due to HICBC not being 'income') was made before June 30, 2021, and the issue was raised before that date.
Finance Act 2022, s97
To satisfy s97(5)(b), the invalidity issue must be specifically identified by a party or the FTT, not simply that the issue arose.
*Hextall v HMRC* [2023] UKFTT 00390 (TC)
*Wilkes v HMRC* established that HICBC is not 'income' for the purposes of discovery assessments under the pre-amended s29 TMA 1970.
*Wilkes v HMRC*
Outcomes
The Tribunal found the assessments to be 'protected' under s97 FA 2022.
While the appeal was made before June 30, 2021, and the *Wilkes* issue was mentioned in subsequent correspondence, the Tribunal found that Woods did not raise the invalidity issue before June 30, 2021, as required by s97(5)(b).