An army veteran has been slapped with a £3,000 child benefit bill by HM Revenue and Customs (HMRC) despite having no children.
Paul Barron was hit with the High Income Child Benefit Charge (HICBC) which is a tax levied on anyone with an income of more than £50,000 who gets child benefit, or whose partner gets it.
He did not realise he had to pay this charge after moving in with his partner and her two children. She had been claiming child benefit for her children since 2009 which came to £40 a week.
After leaving the army, Barron moved in with his girlfriend in 2014 and exceeded the £50,000 threshold for the HICBC.
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Britons are being hit with unexpected child benefit bills
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The veteran was ordered by HMRC to pay back £3,258 in child benefit for the tax years 2015/16 to 2019/2020, as well as £518 in late fees.
Under current tax rules, the member of the household who earns over the £50,000 cap must repay any overpaid amount through a self-assessment form.
Details of this case have surfaced after Baron’s appealed HMRC’s order in court and argued he never had financial responsibility for the children.
The details of the unusual case have come to light after Baron appealed HMRC’s demands, arguing in court that he had never had any financial responsibility for the children.
Mr Baron did not respond to the letter he was originally sent in January as he did not believe the rules applied to him. However, he did reach out to HMRC after receiving a second letter in June 2021.
Representing himself in court, the veteran argued that he was a single man and away on operations when the HICBC was introduced in 2013.
As such, he put forward that he would have been unaware of his tax liabilities and would not have known he had to pay.
In response, the court ruled it was reasonable for Baron to have been unaware of the charge in the 2015/16 and 2016/17 tax years.
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Those earning a certain amount fall foul of the High Income Child Benefit Charge (HICBC)
GETTYDespite this, the judge concluded he was still liable to pay the charge for the tax years 2017/18 to 2018/2020, including late penalties. This bill came to £2,967.
Michelle Denny-West, a tax partner with Moore Kingston Smith, described the situation as “unjust” for anyone moving into a household where children already reside.
An HMRC spokesman told The Telegraph: “We are carefully considering the decision, appreciating the specific circumstances of the affected taxpayer.
“We use a range of communication activity to help people understand if they’re liable for the charge and we monitor tribunal decisions to see what improvements we can make.”