The UK tax body has revealed it will be reviewing a number of penalty fines issued to parents who have been penalised for not submitting tax refunds for child benefit claims.
Since January 2013, it has become mandatory that parents, where at least one individual has earnings over £50,000 a year, have to pay back some of the child benefits they received. And those parents whose income is over £60,000 must return the whole payment.
HM Revenue & Customs (HMRC) will be reviewing the previously issued “failure to notify” penalties to those parents who did not register for the High Income Child Benefit Charge for the tax years 2013-14, 2014-15, 2015-16.
Now, the department has said it is reviewing cases between 2013 and 2016 and will be issuing penalty refunds if it finds the customer had a reasonable excuse for not meeting their tax obligation.
The announcement reads: “A reasonable excuse is something that stopped someone from meeting a tax obligation which they took appropriate care to meet. Decisions on what constitutes a reasonable excuse are based on an objective assessment of individual circumstances.
“Normally customers have to explain why they have a reasonable excuse; however following feedback HMRC is proactively reviewing these cases.”
An HMRC spokesperson said: “HMRC is listening to customers and stakeholders, and reviewing our approach to ensure we are treating everyone fairly. Customers do not need to ask for a penalty refund or contact HMRC. We will issue the refunds, where due, over the next six months.”
Becky O’Connor, from insurer Royal London, said: “The Revenue did not communicate the charge properly at the time it was introduced in 2013.
“As a result, many parents found they not only had to pay back thousands of pounds in tax through self-assessment returns they didn’t know they had to produce, they were also whacked with late payment fines.”
“It’s right and proper that HMRC has changed its mind and will be refunding unfair penalty fines.  These were paid by parents who were unknowingly dragged into a liability for a charge they were never properly told about.”