In Diana Cuffie v HMRC [2021] TC08191, the First Tier Tribunal (FTT) dismissed the taxpayer’s appeal against failure to notify penalties in respect of the High-Income Child Benefit Charge.

  • Ms Cuffie re-registered for Self Assessment in 2013. According to HMRC’s records, this was for the purpose of notifying her liability to the High-Income Child Benefit Charge (HICBC).
  • Tax returns for 2012-13 to 2016-17 were submitted.
    • No self-employment income was declared in 2012-13 or 2013-14.
    • A liability to the HICBC was reported for all years.
  • Ms Cuffie contacted HMRC in 2015 to advise that her self-employment had ended. HMRC had no record of this contact.
  • In March 2017, Ms Cuffie closed her self-assessment record via an online request.
  • Ms Cuffie remained liable to the HICBC after her self-assessment record was closed, but failed to notify HMRC.
  • HMRC charged Failure to notify penalties totalling £531 for the period 2016/17 to 2018/19.

Ms Cuffie Appealed to the FTT on the basis of having a Reasonable excuse. She:

  • Was not aware of her HICBC liability: her previous tax returns were prepared by her accountant.
  • Had not received any support regarding the HICBC.
  • Did not intend to fail to pay her liability.
  • Was not aware of the continued need to file tax returns. She:
    • Paid tax via PAYE.
    • Was not advised by HMRC that she would still need to complete tax returns after her self-employment ceased.

The FTT dismissed the appeal, finding that Ms Cuffie did not have a reasonable excuse for the failure to notify.

  • A taxpayer who is conscious of their tax obligations would have:
    • Checked the returns prepared by their accountant and been aware of the HICBC liability.
    • Established whether there was any continuing liability or reporting obligation after ceasing self-employment.
  • In these circumstances, Reliance on a third party does not constitute a reasonable excuse.
  • Ms Cuffie’s lack of awareness of the HICBC was not objectively reasonable in the circumstances.

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? 

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?

Appeals: Grounds for Appeal Toolkit
What grounds are there to appeal a tax penalty? How can you word a tax appeal? Can you appeal HMRC errors? What is a reasonable excuse? 

Grounds for Appeal: Reasonable excuse
What is considered to be a 'reasonable excuse' when a taxpayer makes an appeal against a tax compliance failure?

How to appeal a tax penalty
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?

External link

Diana Cuffie v HMRC [2021] TC08191


Squirrel ad

 

Are you enjoying our content?

Thousands of accountants and advisers and their clients use www.rossmartin.co.uk as their primary TAX resource.

Register with us now to receive our unique FREE Tax Planning Tips and Advice Guide & our FREE OMB Newsletter.

 

 

Comments (0)

Rated 0 out of 5 based on 0 voters
There are no comments posted here yet

Leave your comments

  1. Posting comment as a guest.
Rate this post:
Attachments (0 / 3)
Share Your Location

 

Enjoying the Practical Tax content on www.rossmartin.co.uk? 

Sign up now to receive a unique FREE Tax Planning Tips and Advice Guide & our FREE Newsletter.

.Squirrel ad