In HMRC v James Robertson [2019] UKUT0209 the Upper Tribunal held that failure to notify penalties were valid where the High-Income Child benefit charge applied; the charge counted as potential lost revenue.

Mr Robertson and his wife were teachers employed under PAYE and not in Self Assessment.

  • Mr Robertson had income over £50,000 so had a duty to notify HMRC that he was liable to the HICBC; he failed to notify as he was unaware of the legislation.
  • HMRC attempted to raise a discovery assessment and penalties and Mr Robertson appealed.
  • The FTT found that no penalties could be applied:
    • there was no potential lost revenue (PLR) to assess; the relevant PLR is the tax shown in an assessment and there was no self-assessment because no notice to file was given by HMRC.
    • HMRC could not make a discovery assessment as the HICBC is not income, which is a requirement of s 29(1) TMA.

The Upper Tribunal allowed HMRC’s appeal and overturned the FTT decision:

  • The FTT made an error in believing that HMRC had to validly assess Mr Robertson in order for PLR to exist.
    • This confused the system of enforcement by which tax debts become enforceable with the charging provisions which give rise to the liability in the first place.
    • The legislation defines PLR as “so much of any income tax…to which P is liable in respect of the tax year as by reason of the failure to notify is unpaid on 31 January following the tax year” and makes it clear that PLR does not depend on an assessment.
  • The question was, was Mr Robertson liable for HICBC for the relevant years, and the answer was “yes”.
  • He did not have a reasonable excuse; the changes had a high profile and wide media coverage.

The UT declined to comment on whether the HICBC was income for the purposes of the discovery assessments.


The FTT had previously reached the same conclusion as the UT here in the case of David Lau v HMRC [2018] TC6463. The judge in Lau decided not to follow the earlier Robertson FTT decision, which it could do as FTT decisions are not binding precedent, whereas UT decisions such as this are.

Presumably Mr Robertson was not one of the 4,885 parents who received penalty refunds on the grounds of reasonable excuse following an HMRC review which concluded that “a reasonable excuse is something that stopped someone from meeting a tax obligation that they took appropriate care to meet.”

Useful guides

High-Income Child benefit charge (HICBC) 
What is the High-Income Child Benefit charge? Who pays it? Can you appeal against an assessment? Are there any useful cases from the tax tribunals?

Penalties: failure to notify
What tax penalties apply if you fail to declare tax?

How to appeal a tax penalty
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?

Discovery assessment and time limits
What is a Discovery Assessment? When can HMRC make a Discovery? What are the time limits for Discovery Assessment? Details, examples and current case law and developments

External link

HMRC v James Robertson [2019] UKUT0209