In David Lau v HMRC [2018] TC6463 the FTT decided not to follow the Robertson decision and decided that penalties did apply for failure to notify the HICBC on the basis that potential lost revenue is not confined to assessments. Ignorance of the law on the HICBC was not considered a reasonable excuse.

In 2014/15 the taxpayer's income exceeded £50,000 and he was subject to the High income child benefit charge (HICBC)

The taxpayer was subject to PAYE and not within self assessment.

On 7 February 2017 HMRC raised an assessment under the Discovery Assessment under s29 TMA 1970 and followed Penalties: failure to notify under sch 41 FA2008

The taxpayer appealed and claimed ignorance of the law.

The judge dismissed the appeal.

  • She disagreed with Judge Thomas' reasoning in James Robertson v HMRC 2017 [TC6410] and decided that the HICBC is 'income' in terms of the discovery provisions and therefore 'revenue' in terms of the calculation of potential lost revenue (PLR) and so a Discovery Assessment was and is possible. 
  • She did not accept that ignorace of the HICBC was a reasonable excuse for the failure to notify as it has been well-publicised.


We now have the highly unsatisfactory result that the only two discovery cases featuring the HICBC that have different outcomes. FTT decisions can be persuasive for other judges but they set no precident. In this case the judge did not go into too much detail as to why she disagreed with Judge Thomas as to whether there was any loss of 'income' to discover,  thus leaving the door open for the taxpayer to appeal on points of law. As the penalties at stake are so low this seems unlikely.

UPDATE: In November 2018 HMRC announced that they would be reviewing cases where a failure to notify penalty was issued to taxpayers who did not register for the HICBC for 2013-2014, 2014-2015, and 2015-2016, and would issue refunds if the taxpayer was found to have a reasonable excuse.

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Useful guides

High income child benefit charge (HICBC) 

Discovery Assessment

Penalties: failure to notify


David Lau v HMRC [2018] TC6463