Tax disputes & investigations

Collyer Bristow instructed in HMRC -v- Wilkes : High Income Child Benefit Charge

On Wednesday 26 May 2021, the Upper Tribunal will hear HMRC’s appeal on the so-called “High Income Child Benefit Charge”. The outcome of the case will affect hundreds of thousands of taxpayers.


On Wednesday 26 May 2021, the Upper Tribunal (The Hon. Mrs Justice Falk DBE and Judge Timothy Herrington) will hear HMRC’s appeal in the leading “High Income Child Benefit Charge” (the HICBC) case.

The taxpayer assessed to the HICBC is Jason Wilkes, but hundreds of thousands of taxpayers will be affected by the outcome of this case.

When the Upper Tribunal’s decision is released, it will set a binding precedent on whether HMRC is able to impose the HICBC by means of a “Discovery Assessment” outside the normal four-year time limit for tax assessments. It may also have implications for the validity of Discovery Assessments more generally.


Mr Wilkes was liable to the HICBC in the tax years 2014-15 to 2016-17. In common with many taxpayers in his position, he was unaware of it at the time. HMRC wrote to Mr Wilkes in November 2018 to tell him that he might be liable to pay the HICBC. After checking the position, Mr Wilkes notified HMRC that he was liable. At that point, HMRC issued Mr Wilkes with “Discovery Assessments” for underpaid tax. Recognising that Mr Wilkes had a “reasonable excuse” for not paying the HICBC at the time, HMRC did not seek to impose penalties on him.

Mr Wilkes (represented by his wife, Mrs Samantha Wilkes) successfully appealed against the assessment to the HICBC in the First-tier Tribunal (FTT): according to the FTT, HMRC have no power to impose the charge by means of Discovery Assessments.

It is against that decision that HMRC now appeals to the Upper Tribunal.

Importance of the Case

If the Upper Tribunal upholds the FTT’s decision, it will mean that HMRC never had any power to issue Discovery Assessments for the HICBC – and therefore the Discovery Assessments issued by HMRC were invalid.

It is not yet known precisely how many Discovery Assessments HMRC has issued in HICBC cases. In principle, the great majority should not survive a finding in favour of Mr Wilkes by the Upper Tribunal, e.g. where a self-assessment tax return was not submitted.

This appeal is on a number of narrow but important technical points relating to the proper meaning of the word “income” in section 29 Taxes Management Act 1970 (which confers on HMRC the power to issue discovery assessments in certain circumstances).


The HICBC was introduced by the coalition government in January 2013. Despite its name, it has since 6 April 2021 affected purely basic-rate taxpayers. Its purpose is to claw back Child Benefit payments from those whose “Adjusted Net Income” for tax purposes exceeds £50,000, though without the need for general means-testing.

From the first, the HICBC was controversial, and the government was repeatedly warned that there were major flaws in the policy and its implementation. In a recent report critical of the HICBC, the Office for Tax Simplification has recommended that Parliament review the HICBC, and reshape the charge and its collection mechanisms.

87% of Child Benefit claimants are women and one of the frequent criticisms of the HICBC is that it indirectly discriminates against women on the basis of sex. In the FTT, HMRC argued that the HICBC is not discriminatory, with no recognition of the statistical evidence to the contrary.


Commenting ahead of the hearing, James Austen, Partner and Head of Tax Disputes at Collyer Bristow LLP, said:

I am delighted to support Jason and Sam Wilkes in this appeal. Their case raises important questions about HMRC’s power to issue Discovery Assessments in HICBC cases, often years after the event. Following this case, we will know for the first time whether HMRC were right to levy the HICBC against hundreds of thousands of taxpayers. Affected families will want to follow the outcome closely.”


James Austen, Partner and Head of Tax Disputes, and Jean-Martin Louw, Associate, both of Collyer Bristow LLP, represent Mr Wilkes pro-bono in this appeal.

Barristers Richard Vallat QC of Pump Court Tax Chambers and Marika Lemos of Devereux Chambers appear for Mr Wilkes pro bono.

Any enquiries on this matter should be made in the first instance to James Austen.




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