Stephen Lee v The Commissioners for HMRC
Decision date: 18 July 2023
Neutral citation: [2023] UKFTT 651 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned Stephen Lee's liability and penalties under the High Income Child Benefit Charge (HICBC) for 2016‑17 to 2019‑20 after HMRC assessed him in May 2022. The Tribunal found Mr Lee and his partner credible, held that Mr Lee had a reasonable excuse for not notifying liability (so penalties were cancelled), applied the ordinary four‑year assessment limit to cancel the 2016‑17 and 2017‑18 assessments, and upheld the 2018‑19 and 2019‑20 assessments, leaving a net liability of £2,702. The Tribunal also found that non‑parentage of one child did not affect HICBC liability.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where a taxpayer has a reasonable excuse for failing to notify liability, section 118(2) of the TMA treats them as not to have failed to notify, which can prevent reliance on the extended 6‑ and 20‑year assessment powers and limit HMRC to the ordinary four‑year assessment period; it can be objectively reasonable for a taxpayer to be unaware of a tax change where publicity/guidance did not reach them and HMRC communications led them reasonably to believe no further action was required.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed that Extra‑Statutory Concession A19 is not, on its wording, confined to PAYE and that HMRC's tax function had access to Child Benefit data, but stated it had no jurisdiction to determine the application of ESC A19. The Tribunal also noted HMRC's refusal letter should have informed Mr Lee of complaint and Adjudicator routes.