Hayden v Revenue & Customs (High Income Child Benefit Charge, reasonable excuse for failure to file return) [2021] UKFTT 51 (TC) (23 February 2021)

Hayden v Revenue & Customs (High Income Child Benefit Charge, reasonable excuse for failure to file return) [2021] UKFTT 51 (TC) (23 February 2021)

The appellant had a reasonable excuse for 2014/15 and 2015/16 due to the complexity of HICBC, inadequate information from HMRC, and lack of clear guidance in the claim forms. For 2016/17, the claim form was explicit and the appellant's circumstances had changed, so no reasonable excuse existed, but the penalty should be reduced to 10% as HMRC became aware of the failure within 12 months of the due date.

Citation
[2021] UKFTT 51
Parties
Appellant: Jonathan Hayden; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
23 February 2021
Procedural Posture
Tax Penalty Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal allowed in full for 2014/15 and 2015/16; allowed in part for 2016/17 with penalty reduced to 10%.
Legal Topics
High Income Child Benefit Charge, Reasonable Excuse, Failure to Notify Liability, Penalty Assessment, Self Assessment Returns
Tax Law High Income Child Benefit Charge Reasonable Excuse Failure to Notify Liability Penalty Assessment Self Assessment Returns

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Parties

Jonathan Hayden

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Penalty Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the appellant had a reasonable excuse for failure to notify liability to the High Income Child Benefit Charge for the years 2014/15, 2015/16, and 2016/17
  2. 2 Whether the penalty for 2016/17 should be reduced to 10%

Ratio Decidendi

The appellant had a reasonable excuse for 2014/15 and 2015/16 due to the complexity of HICBC, inadequate information from HMRC, and lack of clear guidance in the claim forms. For 2016/17, the claim form was explicit and the appellant's circumstances had changed, so no reasonable excuse existed, but the penalty should be reduced to 10% as HMRC became aware of the failure within 12 months of the due date.

Court Disposition

Appeal allowed in full for 2014/15 and 2015/16; allowed in part for 2016/17 with penalty reduced to 10%.

Orders

  • Penalties for 2014/15 and 2015/16 set aside.
  • Penalty for 2016/17 reduced to £176.10 (10% of HICBC).