A Midlands man is challenging a £6,000 tax demand from HM Revenue & Customs for child benefit claimed by his former partner, including payments for two children who are not biologically his. The case highlights a controversial rule that the Institute of Chartered Accountants in England and Wales has called a potential 'reputational disaster' for HMRC.
The High Income Child Benefit Charge claws back the benefit from households where one partner earns over £50,000, with the tax liability falling on the higher earner regardless of who made the claim. Critics say this unfairly targets separated couples, as a person may be liable for funds received by an ex-partner even if they had no control over the claim.
Phil Adams (not his real name) received a letter in May demanding £6,233, later reduced to £6,130, for the period 2014-17. Most of the sum relates to benefit paid to his ex-partner, who already had two children before they met and later had a child together. Adams says he was unaware of the claim and would have stopped the payments if he had known.
HMRC rejected his appeal, stating the legislation is clear. The ICAEW had warned when the charge was introduced that the law was 'seriously flawed in principle and practice', noting that couples could separate or lose touch before the clawback is applied.
Adams argues the responsibility should lie with his ex-partner, who he believes was informed about the charge when she claimed benefit for their child. He says there is no reasonable way for him to have prevented the payments.
