HMRC resources used to fight HICBC penalties

Since the 2016-17 tax year a growing number of cases have been brought to the First-tier Tribunal (FTT) as result of individuals failing to report their liability to pay the high-income child benefit charge (HICBC). Many of these cases dispute an amount of tax or penalty totalling a few hundred pounds. This has led a number of tax professionals to question is this the best use of HMRC resource?

What is the HICBC?

The HICBC was introduced in 2013 by the then chancellor George Osborne. The original aim of the charge was to claw back child benefit from households with a higher rate taxpayer although the threshold at the time of its introduction was set at £50 000 when the threshold for being a higher-rate taxpayer was £42 475.

The charge operates by clawing back child benefit payments once the highest earning household member has adjusted...