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High income child benefit charge – an update

Following the recent Upper Tribunal decision in the case of Wilkes V Revenue & Customs Commissioners, it was held that HM Revenue & Customs (HMRC) could not impose a high income child benefit charge (HICBC) on an individual by way of a discovery assessment where the individual liable to the charge did not file a self assessment tax return.

A discovery assessment is a means for HMRC to collect tax on income which should have been assessed to income tax but was not, however the Upper Tribunal found that for the purpose of discovery assessments child benefit is not income, and as such a discovery assessment is not a valid means of collecting any tax due as a result of the HICBC.

Following the decision, it is understood that HMRC have now been granted the right to appeal to the Court of Appeal.

Collyer Bristow, the firm representing Mr Wilkes in the case against HMRC, has advised that ahead of the upcoming appeal the decision made by the Upper Tribunal is binding and appeals may be possible for individuals affected. Generally, appeals should be raised within 30 days of the discovery assessment, though late appeals may still be accepted at the discretion of HMRC or the courts where there is a reasonable excuse for the lateness, however, it is not clear at present whether HMRC will accept these appeals.

When considering an appeal it is worth noting that HMRC may have other means of collecting the tax due (such as issuing tax returns or simple assessments).

For more information or advice on the high income child benefit charge, please contact Claire Windever below.

Written 28 September 2021.

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