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I don’t usually use this column to discuss individual cases but I want to make an exception this week to share my thoughts on the Erridge case. You can read our summary on page 6, but in brief the taxpayer sold his house to pay assessments to the high-income child benefit charge but then successfully appealed his case to the First-tier Tribunal, resulting in a reduction in the total bill from £19,000 to £2,500.
Had the taxpayer, who was dyslexic and had reading difficulties, applied to postpone the tax when he appealed, it seems highly unlikely that HMRC would have refused postponement. It is not absolutely clear what actually happened here, but even if no postponement application had been made surely somebody at HMRC ought to have realised what was happening and stepped in. It seems that external debt collectors were used to chase the debt and perhaps they did not appreciate the nuances. As far as the penalty is concerned it really does seem inexcusable that HMRC did not follow its own instructions to suspend collection pending the outcome of the appeal. Then there is the fact that HMRC told the taxpayer that he did not earn enough to qualify for a time to pay arrangement: this must have seemed completely counterintuitive to him – surely the higher your earnings the more likely it is that you will be able to pay in full upfront.
I’m not one who harks back to the ‘good old days’ when you could ring the local DI and get problems sorted out in five minutes. That involves too much looking through rose-tinted spectacles. But this case is a sad illustration of how the scope for the common sense approach does seem to have disappeared from the tax system.
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