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Refund of child benefit penalties levied by HMRC

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30 November 2018

HMRC has issued a release advising that they will be undertaking a review of ‘Failure to Notify’ penalties issued in relation to the ‘High Income Child Benefit Charge’ (HICBC).

The HICBC applies where an individual’s income exceeds £50,000. Under the rules, introduced in 2013, child benefit is clawed back at the rate of 1% for every £100 over £50,000. Once an individual’s income exceeds £60,000, the entire benefit is clawed back.

Following criticism of inadequate communications of the new charge to parents and a win for a taxpayer at court, HMRC has confirmed that they will now review penalties levied in respect of the 2013/14, 2014/15 and 2015/16 tax years.

If you were claiming child benefit prior to April 2013 and one parent’s income breached the £50,000 threshold during, or after this tax year, you may be eligible for a refund of penalties levied. HMRC has confirmed, however, that a refund will only be made for those they determine had a ‘reasonable excuse’ for not notifying and will not include those who received communications about the HICBC.

No action is required to obtain a refund as HMRC has advised that they will issue these automatically, where due, over the next six months.