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Tax tribunals play postcode lottery with HIBIC penalty appeals
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Fifty shades of HICBC: Courts play penalty lottery

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The first tier tribunal (FTT) system has recently heard a large number of cases challenging penalties for failing to report the HICBC. Andy Keates investigates how taxpayers can resist such penalties.

18th Jun 2020
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Virtually all the FTT cases concerning the high income child benefit charge (HICBC) involve appeals against penalties charged for failing to notify HMRC of chargeability (TMA1970, s7). This is a requirement when an individual’s “adjusted net income” exceeds £50,000 and child benefit is being claimed by the individual or their spouse/partner.

Unaware of the law

In most of these appeals the main ground has been that the taxpayers were entirely unaware they had a requirement to notify HMRC.

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Replies (3)

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By Homeworker
22nd Jun 2020 10:31

I have dealt with two such cases where in one the husband claimed ignorance of the legislation and in the second he believed that his wife had stopped claiming. HMRC agreed in both to suspend the penalties.

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Replying to Homeworker:
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By Andy Keates
23rd Jun 2020 17:07

I would say that such a scenario would be an ideal opportunity to suspend penalties. Bravo to HMRC for doing so.
Out of interest, what conditions did HMRC impose on the suspension?

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By cfield
26th Jun 2020 10:12

Here's a good idea. Instead of expecting people to file tax returns solely because of HICBC, why don't they just send a P800 and unilaterally adjust their PAYE code? Then it would be up to the taxpayer to appeal if they are no longer living with the claimant.

They mess up our tax codes in 101 different ways these days, yet for something like this, where it is clearly the best solution, they don't bother.

Perhaps they just prefer charging penalties. That's probably why they didn't make solicitors deal with NRCGT returns (or the new 30 day disclosure form) or even make it mandatory for them to inform their clients they have to do it themselves.

It really makes you wonder whether it's just a total failure of common sense or some sinister plot to trip taxpayers up every way they know how.

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