High Income Child Benefit Charge taxpayers may be entitled to a penalty refund

High Income Child Benefit Charge penalty cases will be reviewed and refunds issued if it is found that the customer had a reasonable excuse for not meeting their tax obligation, HM Revenue & Customs (HMRC) has announced.

The tax authority said it would review cases where a ‘Failure to Notify’ penalty was issued for the tax years 2013/14, 2014/15 and 2015/16.

Legally, taxpayers who have an individual income over £50,000 and either they or their partner receives Child Benefit must pay a tax charge, known as the ‘High Income Child Benefit Charge’.

The charge is collected through self-assessment or the pay as you earn (PAYE) system, so those eligible to pay the charge must register to complete a tax return.

However, HMRC has said it will review cases during certain tax years and issue refunds where it finds the customer had a “reasonable excuse” for not registering for the charge.

According to the Revenue, a “reasonable excuse” is something that stopped someone from meeting a tax obligation which they took appropriate care to meet. It added that decisions on “what constitutes a reasonable excuse” are based on an “objective assessment of individual circumstances”.

“Normally customers have to explain why they have a reasonable excuse. However, following feedback, HMRC is proactively reviewing these cases,” the tax authority said.

It says this includes families who made a claim for Child Benefit before High Income Child Benefit Charge was introduced, and where one partner’s income subsequently increased to over £50,000 in or after the 2013 to 2014 tax year.

“This is because the higher earner in a household who pays the charge may not be the same person claiming Child Benefit on behalf of the household,” added HMRC.

If you received a penalty during this time you do not have to do anything. HMRC will proactively contact you if you qualify for a refund.

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Gwyn Williams

Gwyn Williams

Director at Clay Shaw Thomas
In Business: Helping clients to protect and grow their business and personal wealth In Life: Cycling and chilling with my family