In HMRC v Jason Wilkes [2021] UKUT150, the Upper Tribunal (UT) agreed that the High-Income Child Benefit Charge was not income to be Discovered under s.29 TMA 1970. HMRC had interpreted s.29 too broadly and could have used other powers to collect the tax due.

This was a case relating to the High-Income Child Benefit Charge (HICBC) which turned on the statutory construction of the Discovery assessment rules under s.29 TMA 1970. The amount of tax involved was small, however, the case has wider significance about when the discovery provisions can, and should, be used by HMRC. Hence the taxpayer’s legal team agreed to act on a pro bono basis.

Mr Wilkes had been assessed to the HICBC under the discovery provisions at s.29(1)(a) TMA 1970 for three tax years.

The Upper Tribunal (UT) dismissed HMRC’s appeal.

UPDATE: HMRC is appealing the decision to the Court of Appeal.

Finance Act 2022 Update

Note that Finance Act 2022 has changed the discovery provisions retrospectively such that they can be used to collect taxes on omitted High-Income Child Benefit Charge.

Useful guides on this topic

High-Income Child Benefit Tax Charge
What is the High-Income Child Benefit Charge? Who pays it? Can you appeal against an assessment? Are there any useful cases from the tax tribunals? 

Discovery assessments
When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences? Case law tracker.

S.8(1) notice to file a tax return
This guide examines the implications of a notice sent to an individual under s.8(1) TMA 1970 to file a tax return.

Penalties: Failure to Notify
What tax penalties apply if you fail to notify HMRC that you are chargeable to tax? Can they be appealed or reduced?

How to appeal an HMRC decision
Disagree with an HMRC decision? How to appeal, what type of decision can you appeal, what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

Grounds for Appeal: HMRC error or flaw
When can an error, mistake or procedural flaw made by HMRC provide a valid ground for making an appeal?

Do I have to file a tax return?
When does an individual need to file a tax return? In what circumstances do HMRC need to be notified that a tax return is required?

External link

HMRC v Jason Wilkes [2021] UKUT150 


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