Naila Hussain v The Commissioners for HMRC
Decision date: 21 June 2023
Neutral citation: [2023] UKFTT 545 (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 HMRC discovery assessments and penalties for the High Income Child Benefit Charge (HICBC) for 2014/15–2019/20 and related failure-to-notify and late-filing penalties. The Tribunal found Ms Hussain lacked knowledge of HICBC until HMRC's "nudge" letter of 4 November 2019, which ended her reasonable excuse; her subsequent delay in remedying the liability was unreasonable. HMRC's discovery assessments and the Schedule 41 and Schedule 55 penalties were upheld and the appeal was refused.
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: low
A taxpayer's ignorance of the HICBC may amount to a reasonable excuse in limited circumstances, but that reasonable excuse ceases once the taxpayer receives clear, direct notice (the "nudge" letter) and fails to act without unreasonable delay. Once the reasonable excuse has ended, HMRC may rely on extended assessment powers (including s36 TMA) and impose failure-to-notify and late-filing penalties where the taxpayer does not promptly remedy the default.
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 noted (obiter) that HMRC are not obliged to notify every individual of legislative changes and that assessments of what is reasonable depend on individual facts and taxpayer attributes; it reiterated the narrow circumstances in which other tribunals have found a reasonable excuse for HICBC (e.g. longstanding Child Benefit claims predating HICBC and no direct notification).