In HMRC v Wilkes, the Upper Tribunal held that HMRC may not impose the high income child benefit charge (HICBC) by means of a discovery assessment issued under TMA 1970 s 29 where the individual liable to the charge did not file a self-assessment tax return. The UT found that HMRC had interpreted TMA 1970 s 29(1)(a) too broadly as it could not be inferred that it was intended by Parliament to cover any shortfall in tax; the FTT’s approach in Wiseman was rejected as being ‘an overly strained interpretation of s 29(1)(a)’; and the legislation did not contain an obvious drafting error that should be corrected following the principles in Inco Europe. The UT found for the taxpayer on all three of HMRC’s arguments, and its reasoning seems unassailable. Affected taxpayers in a similar position should therefore consider lodging appeals. It remains to be seen how HMRC will respond.
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In HMRC v Wilkes, the Upper Tribunal held that HMRC may not impose the high income child benefit charge (HICBC) by means of a discovery assessment issued under TMA 1970 s 29 where the individual liable to the charge did not file a self-assessment tax return. The UT found that HMRC had interpreted TMA 1970 s 29(1)(a) too broadly as it could not be inferred that it was intended by Parliament to cover any shortfall in tax; the FTT’s approach in Wiseman was rejected as being ‘an overly strained interpretation of s 29(1)(a)’; and the legislation did not contain an obvious drafting error that should be corrected following the principles in Inco Europe. The UT found for the taxpayer on all three of HMRC’s arguments, and its reasoning seems unassailable. Affected taxpayers in a similar position should therefore consider lodging appeals. It remains to be seen how HMRC will respond.
If you are not a subscriber, subscribe now to read this content.
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