In Thimmaiah Gummatira v HMRC [2020] TC7767, the First Tier Tribunal (FTT) dismissed an appeal against penalties for failure to notify HMRC of a liability to the High-Income Child Benefit Charge. Neither a reasonable excuse nor special circumstances existed to warrant a reduction in the penalties.

The High-Income Child Benefit Charge (HICBC) applies to child benefit payments made after 7 January 2013 to affected individuals. An extensive campaign was launched by HMRC in 2012 to make the general public aware of the change in the law. Targeted correspondence was sent to higher rate taxpayers to provide further information on the HICBC and enable any affected individuals to take appropriate action.

  • The taxpayer was sent a reminder letter (SA 252) from HMRC on 17 August 2013 advising that if he was affected by the HICBC and had not opted out of receiving child benefit to avoid it, he must notify HMRC by 5 October 2013 in order to file a self-assessment tax return, pay the HICBC and avoid any penalties. The letter also directed the taxpayer to an HMRC website designed to help users decide whether the HICBC applied to them.
  • The taxpayer responded on 11 December 2013 indicating that he had submitted his details online to HMRC to 'check whether I was affected by it'. HMRC emailed the taxpayer thanking him for 'notifying us that you are not affected by the High-Income Child Benefit Charge' and indicated that they would be in touch within four weeks if any further information was needed. There was no evidence to suggest that the taxpayer sought to challenge this statement by HMRC or take any further action.
  • An HMRC Officer reviewed the taxpayer’s case in November 2017 and assessed a total liability of £2,949 to the HICBC, covering three tax years. This was accepted by the taxpayer.
  • Tax penalties of £407.50 were raised for failure to notify HMRC. These included reductions on account of prompted disclosure and non-deliberate behaviour by the taxpayer. On appeal by the taxpayer, HMRC concluded that neither a reasonable excuse nor special circumstances existed to warrant a further reduction in the penalties.
  • The taxpayer argued that as a new British citizen, he had limited experience of the British tax system and was not aware of the change in law. He also concluded that no action was required from him as HMRC did not contact him within four weeks of their email dated 11 December 2013.


The FTT dismissed the taxpayer's appeal and held that:

  • The HMRC assessments for HICBC covering the three tax years were valid.
  • The taxpayer’s argument was not a reasonable excuse. Given the evidence indicated that the taxpayer received an SA 252 from HMRC, submitted his details online to HMRC to check if the HICBC applied and did not seek to challenge the statement in HMRC’s email dated 11 December 2013, the FTT concluded it was not objectively reasonable for the taxpayer in their specific circumstances to have been ignorant of the law.
  • There was no evidence to suggest that special circumstances applied.
  • The penalties assessed for failure to notify HMRC should be upheld.


Unfortunately, many taxpayers have been caught out by the HICBC as they are either unaware of the rules or simply think that the government's IT systems all interconnect. The situation has been that even though HMRC took over the administration of Child Benefit from the Department of Work & Pensions and soon after the HICBC applied to higher rate taxpayers, this could not be automatically coded out either by PAYE or under Self Assessment as taxpayers might have anticipated, even if they were aware of how it was calculated.


High-Income Child Benefit Tax Charge
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? 

How to work out the High-Income Child Benefit Tax charge
How do you work out the High-Income Child Benefit Tax Charge?

Penalties: Failure to notify
What tax penalties apply if you fail to declare tax? A guide for subscribers.

External links

Thimmaiah Gummatira v HMRC [2020] TC7767