Rabina Kajla v The Commissioners for HMRC
[2024] UKFTT 193 (TC)
Scott Macarthur v The Commissioners for HMRC
24 November 2023
[2023] UKFTT 997 (TC)
First-tier Tribunal
Someone got a penalty for not telling the tax office about a tax they owed related to child benefit. They said they didn't know about the tax, but the tax office had sent them letters telling them about it. The judge said the letters were enough notice, so they didn't have a good excuse for not paying, and the penalty stood.
Key Facts
- •Appeal against a £217.08 penalty for failing to notify liability to the High Income Child Benefit Charge (HICBC) for the tax year 2017/2018.
- •Appellant accepted the tax assessment but appealed the penalty.
- •Appellant was not required to file a tax return for 2017/18 and received no notice to do so.
- •HMRC claimed to have sent an SA 832 letter, but no evidence was provided, and the appellant denied receiving it.
- •Appellant's spouse was the higher earner, and the child benefit claim form clearly stated the HICBC criteria.
- •HMRC sent nudge and reminder letters in 2019, but subsequent letters in 2021 were sent to an incorrect address.
- •Appellant contacted HMRC in December 2022, appealing against the assessment and penalty.
- •Appellant argued ignorance of the HICBC and the requirement to notify.
- •The Tribunal found that the nudge and reminder letters were sent to the correct address and received by the appellant.
Legal Principles
Reasonable excuse for failing to notify tax liability under section 7 TMA.
Schedule 41, Finance Act 2008; paragraph 20; 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
Objective test for reasonable excuse: Was the taxpayer's action reasonable for a responsible person in their circumstances?
The Clean Car Co Ltd v C&E Commissioners [1991] VATTR 234
Ignorance of the law can be a reasonable excuse in certain circumstances.
Christine Perrin v HMRC [2018] UKUT 156; Naila Hussain [2023] UKFTT 00545; Mark Goodall v HMRC [2023] UKFTT 18 (TC); Leigh Jacques v HMRC [2020] UKFTT 331
Burden of proof for reasonable excuse rests on the appellant.
Case law and implicit in the legal framework
Outcomes
Appeal dismissed; penalty upheld.
Appellant did not have a reasonable excuse for failing to notify liability, as he was notified via letters sent to the correct address. His ignorance of the law, while potentially a reasonable excuse, was superseded by the notification received, and he failed to act after this notification.