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 FTT dismissed the taxpayer's appeal and held that:


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