Ignorance of the law was an excuse

The taxpayer’s wife claimed child benefit for their three children - in April 2010 for their first child and in November 2014 for the second and third. Neither the taxpayer nor his wife’s adjusted net income exceeded £50 000 when making the claims. This happened for the first time in 2016-17 when the taxpayer’s income exceeded that sum.

In October 2019 HMRC sent the taxpayer a nudge letter suggesting that he might be liable to the high income child benefit charge (HICBC) but the taxpayer said he did not receive it. In April 2021 the taxpayer was selected for an in-depth review as to whether he had failed to notify his liability to the HICBC. As a result HMRC found he was liable for the years 2016-17 to 2018-19 and issued assessments and penalties.

The taxpayer appealed.

The First-tier Tribunal decided the taxpayer did have a reasonable excuse...