Owen McCloskey

The law centre took judicial review proceedings to challenge a decision by HMRC to withdraw child benefit from its client, who was in minimum wage employment, and allocate it to her ex-husband, a high-earner whose salary meant he was liable to repay the benefit to HMRC.

The ‘high income child benefit tax charge’ rules, introduced 10 years ago, mean that people earning over £50,000 are required to repay a portion of any child benefit they receive. Anyone earning over £60,000 must repay all the child benefit they receive.

The High Court subsequently ruled that HMRC should have considered the impact of its decision, as well as “who stands to lose most” when choosing which parent should be awarded child benefit.

The judge considered that had the decision-maker correctly followed the guidance, they “may have decided the decision was not fair and reasonable and that an ordinary member of the public may not have considered it to be fair and reasonable”.

Owen McCloskey, head of social security at Law Centre NI, said: “We are really pleased that this decision clarifies the rules on how child benefit should be applied in cases of joint custody.

“We want to ensure that HMRC properly considers the impact of higher income tax charges in its decision-making when dealing with parents who share equal joint custody of their children. We now await HMRC’s issue of a fair and reasonable decision.”

Ursula O’Hare, director of Law Centre NI, said: “Child benefit is a vital financial support to struggling parents and we want to see HMRC apply the rules in a way that maximises the amount of money reaching children. This means prioritising parents who are not in the high earning income bracket because ultimately the child loses out.

“We hope that this decision leads to HMRC reviewing its practice and taking into consideration the impact on the child when making its decisions.”

The law centre brought the case with the pro bono support of barristers Donal Sayers KC and Lara Smyth BL, and the Public Interest Litigation Support (PILS) Project.