High Income Benefit Charge penalties – did you know about it?
The High-Income Child Benefit Charge (“HICBC”) was brought in from 7 January 2013 to clawback child benefit claimed where the claimant or their spouse/ cohabiting partner received adjusted net income over £50,000.
Where the rules apply, any child benefit claimed is clawed back on a sliding scale such that it is fully repayable by the time adjusted net income reaches £60,000.
Many taxpayers have fallen foul of the rules since they were introduced and suffered failure to notify penalties as a result.
A tax case in the Summer highlighted the validity of the penalties and sparked a review by HMRC as to whether the penalties were fair the results of which were recently published.
As a result of their review, HMRC issued refunds in 4,885 cases out of the 35,000 considered covering the tax years 2013/14 – 2015/16 where the taxpayer had a reasonable excuse.
From 2016/17 onwards HMRC have been writing to taxpayers who they think are liable for the HICBC. It is unlikely they will agree a reasonable excuse for failing to notify where the taxpayer has received a letter telling them about it.
This article was written by Katie Evans, Tax Consultant. If you would like to discuss the above, please contact us.
Related news and insights
Subscribe to our newsletters
Our complimentary newsletters and event invitations are designed to provide you with regular updates, insight and guidance.
You can unsubscribe from our email communications at any time by emailing firstname.lastname@example.org or by clicking the 'unsubscribe' link found on all our email newsletters and event invitations.