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Law Centre NI successfully challenges HMRC allocation of Child Benefit

For parents with 50/50 joint custody who get Child Benefit, it can be complicated. In a recent case, Law Centre NI successfully clarified the rules on how HMRC should allocate Child Benefit in these circumstances.

The Law Centre took Judicial Review proceedings to challenge the decision by HMRC to withdraw Child Benefit from our client, who was in minimum wage employment, and allocate it to her former husband, a high earner, whose salary meant he was liable to repay the benefit to HMRC.

The judge 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.”

We could not have brought this case without the pro bono support of our barristers, Donal Sayers KC and Lara Smyth BL and we thank them for their support.  We also thank the Public Interest Litigation Support (PILS) Project for its support.


The ‘high income child benefit tax charge’ rules which were introduced ten years ago, mean that people earning over £50,000 are required to repay a portion of any Child Benefit they receive, so do not receive the full financial assistance available. Anyone earning over £60,000 is required to repay all the Child Benefit they receive.

In our client’s case, both parents had 50/50 custody of their child. HMRC’s decision to award child benefit to the higher earner meant that our client lost out on vital financial support for her child.

How widespread is this issue?

It is impossible to tell how many families have been or are affected by current practice.  A recent Freedom of Information request from Law Centre NI revealed that HMRC has taken approximately 25,000 discretionary decisions across the UK about who should get Child Benefit since the introduction of the high-income child benefit tax charge in 2013.

HMRC does not record how many times an award of benefit has gone to a high-income earner, rather than to the parent with lower income.

Decision makers must decide who stands to lose most, but, at the moment, HMRC guidance does not explicitly refer to the potential impact on the child of a decision to award Child Benefit to a parent with equal custody who is subject to the higher-income child benefit tax charge.

The judgment can be found here: