The First-tier Tribunal has allowed an appeal against penalties in connection with the high income child benefit charge (HICBC). Why was this taxpayer different?

Case facts

In Belloul v HMRC, the taxpayer (B) earned employment income in excess of £50,000 and failed to notify HMRC that he was liable to the HICBC between 2013 and 2016. HMRC contacted B in 2017 and he agreed to pay the tax charge of £4,780. B appealed against penalties of £829 for failure to notify on the basis that he was not aware of the HICBC and had not been notified of any changes in the law by either HMRC or the Child Benefit office. HMRC contended that ignorance of the law is no defence and it had written to B in 2013 advising him to check his tax code and whether he was liable to the HICBC.


The Tribunal allowed the appeal because the B and his wife were unaware of the HICBC. They were viewed as conscientious taxpayers who were used to the PAYE system and could not be expected to trawl through HMRC’s website searching for changes in the law which may affect them. If HMRC had been able to prove that the changes had been communicated to them, the appeal would not have been successful. However, the tribunal did not accept the evidence that HMRC had written to B because its systems stored the content of the communication, but not the actual letter with the postal address.

This case debunks the often-quoted theory that ignorance of the law is no defence and shows that in some cases it will be worth appealing against penalties where the taxpayer is not aware of changes in the law. In response to this case, HMRC may change the way correspondence is recorded to avoid losing out in future.

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