Tribunal Upholds Penalties for Failure to Notify High-Income Child Benefit Charge Liability

Citation: [2023] UKFTT 994 (TC)
Judgment on


In the case of Christopher Legg v The Commissioners for HMRC, the UK First-tier Tribunal (Tax Chamber) assessed penalties under Schedule 41 of the Finance Act 2008 related to the appellant’s failure to notify liability to the High-Income Child Benefit Charge (HICBC). The Tribunal evaluated whether Mr. Legg was indeed liable for the charge, whether he received the communications from HMRC alerting him to this liability, and the validity of suggested reasons that could constitute a reasonable excuse. This article analyzes the legal principles at play and the Tribunal’s reasoning in reaching its decision.

Key Facts

Mr. Legg appealed against penalties levied by HMRC for failing to notify his liability to the HICBC. HMRC contended that the appellant’s Adjusted Net Income (ANI) surpassed the £50,000 threshold consequently obliging him to notify under section 7 of the Taxes Management Act 1970 (TMA). The appellant did not contest his liable status but claimed ignorance of the law and lack of receipt of HMRC communications as his reasonable excuse. The Tribunal had to consider these factors and whether ‘special circumstances’ could justify the reduction of penalties.

The Tribunal’s analysis was based on multiple legal principles, drawn from the relevant statutes and case law precedents:

  1. Statutory Obligation to Notify: Under section 7 TMA, taxpayers who are chargeable to income tax or capital gains tax and have not received a filing notice must notify HMRC within six months post the applicable tax year. This obligation applies regardless of participation in the self-assessment system or if income is taxed at source under PAYE.

  2. Reasonable Excuse: The Tribunal assessed the concept of ‘reasonable excuse’ by referencing the objective test set in Clean Car, which is applied to the specific taxpayer’s circumstances, taking into consideration their experience and attributes while expecting compliance with tax responsibilities.

  3. Ignorance of Law: Case law precedent (Hesketh, Lau, Johnstone, and Nonyane) establishes that ignorance of the law generally does not qualify as a reasonable excuse for non-compliance.

  4. HMRC’s Duty to Notify: The case analyzed whether HMRC has a statutory duty to inform taxpayers about changes in tax law affecting them. Based on Robertson, Johnstone, and Lau, the Tribunal reinforced that no such obligation exists.

  5. Prompted Disclosure: The Tribunal deliberated on whether the disclosure was ‘prompted’ based on the timeliness and quality of the appellant’s response to HMRC’s correspondence as it influences the penalty’s calculation under Schedule 41.

  6. Special Circumstances: Referencing Collis, the Tribunal examined whether ‘special circumstances’ warranted penalty abatement under Schedule 41, para 14, which must be ‘exceptional, abnormal, or unusual.’


The Tribunal found that:

  1. Mr. Legg was in statutory default for failing to notify his liability for the HICBC.
  2. No reasonable excuse was established as ignorance of the law does not constitute an adequate defense. Also, Mr. Legg’s letter inconsistencies undermined his assertion that he did not receive HMRC’s ‘nudge’ letters.
  3. The Penalties were calculated correctly under Schedule 41, reflecting a non-deliberate failure with prompted disclosure.
  4. No special circumstances applied that could warrant a penalty reduction.


The Tribunal’s decision in Christopher Legg v The Commissioners for HMRC underscores the paramount importance of taxpayer awareness and compliance with statutory notification obligations. The judgement reiterates established legal principles that ignorance of the law does not absolve taxpayers from penalties for non-compliance and that HMRC is not legally bound to inform taxpayers individually about legislative changes. As such, legal professionals must remain vigilant and advise their clients accordingly to navigate and adhere to the complexities of tax law and its obligations.

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