Wilkes v HMRC: When HMRC's Discovery Assessment Falls Outside The Statute

A brown envelope arrives. Inside: three HMRC discovery assessments, one for each of the last three tax years, totalling something like £4,000. The reason given is the High Income Child Benefit Charge—HICBC—that you did not know you owed because your partner received the child benefit, not you.

Jason Wilkes got exactly that letter in December 2018. The assessments came to £4,244 across 2014-15, 2015-16 and 2016-17. He took it to the First-tier Tribunal, won, watched HMRC appeal to the Upper Tribunal, won again, and then watched HMRC appeal a second time to the Court of Appeal. In December 2022 he won for a third time. The Court of Appeal held that HMRC's discovery assessment power did not reach HICBC at all. The whole £4,244 was wiped out.

Within ten weeks, Parliament had introduced legislation to reverse the case retrospectively. The reversal works for almost everyone who came after Mr Wilkes—but not for everyone. There is a narrow class of taxpayers who are still protected, and a much larger class who are not. The line between them turns on one date and two cumulative conditions. This is who is on which side, and what to do if you are on the wrong one.

What The Case Was About

Mr Wilkes was an employed taxpayer paid through PAYE. For 2014-15, 2015-16 and 2016-17 his adjusted net income was over £50,000 (the HICBC threshold throughout those years) and was higher than his wife's, who received the child benefit. Under the HICBC rules he was liable to the charge. He did not know that—a common pattern, because HICBC is administered through self-assessment but is triggered by a benefit somebody else receives.

He had not notified HMRC of any liability under section 7 TMA 1970. HMRC had not sent him a notice to file under section 8 TMA 1970. He had not filed a return. By the time HMRC's "nudge letter" arrived on 30 November 2018, several years had passed.

A nudge letter is HMRC's standard prompt: "Do you have to pay the HICBC?" Mr Wilkes phoned HMRC the next working day. He confirmed his income was over £50,000. He was asked to use HMRC's child benefit tax calculator. On 18 December 2018, an HMRC officer concluded HICBC was payable for all three years. On 20 December 2018, HMRC issued three discovery assessments under section 29 TMA 1970:

HMRC also considered a "failure to notify" penalty under Schedule 41 FA 2008, but accepted that Mr Wilkes had a reasonable excuse and dropped the penalty. That is why the case became such a clean test of the assessment question: only the £4,244 was in dispute, with no penalty appeal muddying the legal point.

The amount is small. The principle was not. If HMRC could not use section 29 to recover HICBC from a non-filer, an entire compliance approach—chasing HICBC through discovery assessments where no return had been filed—would collapse. HMRC fought it through three courts. Mr Wilkes was represented at the Court of Appeal pro bono by Richard Vallat KC, Marika Lemos and Collyer Bristow LLP. Most appellants in a £4,244 HICBC dispute do not get a King's Counsel.

What An HICBC Discovery Letter Looks Like

If you are reading this article because you have just received your own brown envelope, here is what to look for to confirm what you have. The same five features appear on most HICBC discovery letters:

• A heading that includes the words "Notice of Assessment" or "Assessment for High Income Child Benefit Charge".
• An explicit statutory reference—typically "under section 29 Taxes Management Act 1970". That phrase is what makes this a Wilkes-relevant letter. A letter that cites only Schedule 1 FA 2012 (the HICBC charging provisions) without section 29 is a different kind of notice.
• A year-by-year breakdown, often as a small table showing the tax year, the HICBC amount, and any interest. Discovery assessments come one per tax year.
• An HMRC reference number—the format is typically a long string starting with your National Insurance number—and a date stamp telling you to appeal within 30 days.
• For non-filers, there is usually also a separate "failure to notify" penalty notice under Schedule 41 FA 2008, which is its own separate appeal.

A "nudge letter" looks different. It asks whether you might owe HICBC; it is not an assessment. If all you have is a nudge letter, you are not yet under assessment and have a different decision tree—engage with HMRC, work out your liability, and consider whether to come forward voluntarily before they assess.

Why Discovery Assessments Are A Statutory Power

A discovery assessment is HMRC's back-stop. It lets HMRC raise an assessment outside the normal enquiry window when something has gone wrong—HMRC has "discovered" a tax shortfall. But it is a statutory power, not a general one, and the boundaries of the power matter as much as its existence.

Section 29(1) TMA 1970 gives HMRC three—and only three—gateways to a discovery assessment. The version in force during the Wilkes years (and right up until FA 2022 rewrote it) said HMRC could assess if they discovered, as regards any person and a year of assessment:

• (a) that any income which ought to have been assessed to income tax, or chargeable gains which ought to have been assessed to capital gains tax, had not been assessed; or
• (b) that an assessment to tax was, or had become, insufficient; or
• (c) that any relief which had been given was, or had become, excessive.

If HMRC are inside one of those three gateways, they may assess in the amount "which ought in his or their opinion to be charged in order to make good to the Crown the loss of tax". If they are not inside one of the three, they cannot.

The fall-back conditions in section 29(2)–(5)—the staleness arguments, the hypothetical-officer test, the protection for taxpayers who have made full disclosure—only matter where the taxpayer has filed a return. Mr Wilkes had not. So those conditions did not help him, but they did not need to. His defence was structural: gateway (a) did not open at all, because HICBC was not "income".

That is the entire case in one sentence. Everything else in Wilkes is the Court of Appeal explaining why HMRC's attempts to widen "income" failed.

What HICBC Actually Is, And Why That Matters

HICBC was introduced in 2013 by Schedule 1 of the Finance Act 2012. The charging provisions are in Chapter 8 of Part 10 of ITEPA 2003, at sections 681B to 681H. For a full breakdown of how the charge bites, see our HICBC hub article.

What matters for Wilkes is where HICBC sits in the structure of the income tax calculation. Income tax is calculated through the seven steps in section 23 of the Income Tax Act 2007. Steps 1 to 6 identify income from each source, apply reliefs, allowances and rates, then deduct tax reductions. Step 7 adds in "any amount of tax for which the taxpayer is liable" under the miscellaneous charging provisions listed in section 30 ITA 2007.

HICBC is a step-7 charge. So are the gift aid clawback, the lifetime allowance charge, the annual allowance charge, the unauthorised pension payments charge, and the special lump sum death benefits charge, among others. The Court of Appeal adopted (at paragraphs 21 to 22 of the judgment) the description from Knibbs v HMRC [2019] EWCA Civ 1719: the common feature of step-7 charges is that "they impose liabilities to income tax that are not based on any actual amount of income". They are stand-alone charges collected through the income tax machinery—tax that flows through the income tax return, but not tax on income.

A "stand-alone charge", in plain English, means a charge that exists on its own terms—it is not a tax on the £X of income you received, it is a tax that becomes payable because something else has happened. For HICBC, the trigger is that somebody in your household received child benefit while your income was above a threshold. The amount of the charge depends on your income, but the charge is not levied on your income. That distinction is technical, and it is the entire reason Wilkes was decided the way it was.

For the years at issue in Wilkes, the threshold was £50,000. The threshold rose to £60,000 from 6 April 2024. We use the £50,000 figure throughout when describing Mr Wilkes's facts because that was the law at the time.

The Long Road To The Court Of Appeal

The procedural history is short by tax-litigation standards but worth tracing because each court did a slightly different job.

First-tier Tribunal. The hearing was at the Bristol Civil & Family Justice Centre on 12 March 2020. The panel was Judge Zachary Citron and Ms Jane Shillaker. Their decision was released on 15 June 2020 as Wilkes v HMRC [2020] UKFTT 256 (TC). They allowed Mr Wilkes's appeal and reduced the discovery assessments to nil. The FTT held that "income" in section 29(1)(a) meant income, and HICBC was not income.

Upper Tribunal. HMRC appealed. The hearing went to Mrs Justice Falk (then a UT judge in the Tax and Chancery Chamber, now Falk LJ in the Court of Appeal) and Upper Tribunal Judge Timothy Herrington. They released HMRC v Wilkes [2021] UKUT 150 (TCC) on 30 June 2021. They dismissed HMRC's appeal—the FTT had been right. That date matters, because Parliament later used 30 June 2021 as the cut-off for the savings provision discussed below. The UT also rejected HMRC's fall-back argument that all of Mr Wilkes's PAYE income could be assessed under section 29 and the HICBC bundled into that assessment.

Court of Appeal. HMRC appealed again. The hearing was on 23 and 24 November 2022. The panel was Newey LJ (lead judgment), Baker LJ and Arnold LJ. The decision was handed down on 7 December 2022 as HMRC v Wilkes [2022] EWCA Civ 1612. Newey LJ wrote the only substantive judgment; Baker LJ and Arnold LJ each said only "I agree" (paragraphs 53 and 54). The appeal was dismissed.

What did not happen: no further appeal to the Supreme Court. By December 2022, Parliament had already changed the law going forward, so HMRC had no reason to pursue the case any further—they had won on the law that mattered for future years even while losing the case in front of them. That is how Wilkes sits in the landscape: a definitive judicial answer on the old law, overlaid by a parliamentary fix that ran in the opposite direction.

What Newey LJ Held

Newey LJ identified three issues at paragraph 23 of the judgment. He rejected all three. They are worth taking one at a time because each does different doctrinal work.

Issue (i): "income" Does Not Mean "amount"

HMRC's first argument was that, on a purposive reading, "income" in section 29(1)(a) ought to be read as "amount"—any amount of income tax that ought to have been assessed but was not. That would have caught HICBC, because HICBC is an income tax charge even if it is not on income.

Newey LJ rejected this at paragraph 29 for four cumulative reasons. The first is the plain wording: section 29(1)(a) speaks of "income", and HICBC "is neither 'income' nor even charged on income". The second is that section 29 is targeted, not residual: Parliament restricted the discovery power to the three specific circumstances in (a), (b) and (c), and "It cannot be inferred that Parliament intended section 29(1) to operate wherever income or capital gains tax was thought to be outstanding". The third is the historical point: when section 29(1)(a) was last recast in 1994/1998, HICBC did not exist, so there was no anomaly the words "ought to have been assessed" needed to cure. The fourth is the killer: even if "income" did mean "amount", that would not save HMRC, because HICBC is not "an amount which ought to have been assessed to income tax" either. HICBC is "an extra charge to income tax", not an amount assessed to income tax. The architecture of section 23 ITA 2007 puts HICBC in step 7, outside the income calculation entirely.

Issue (ii): The "All Of His Income" Fall-Back

HMRC's fall-back argument was that, because Mr Wilkes had failed to notify under section 7 TMA, all of his PAYE income "ought to have been assessed" through a self-assessment return that was never filed. Once gateway (a) was open in that way, HMRC could then assess "in the amount … which ought … to be charged to make good to the Crown the loss of tax"—and they argued that loss of tax could include the HICBC.

Newey LJ rejected this at paragraphs 36 to 38. The reason, at paragraph 36, was that "the loss of tax" in section 29 is not a free-standing concept—it ties back to the gateway that opened. Where the gateway is (a) (income not assessed), the assessment must address "the income tax lost on that income". You cannot use gateway (a) to assess income tax on something that is not the income that triggered the gateway. At paragraph 37, he made the point bluntly: HMRC had no reason to think Mr Wilkes's failure to file had occasioned any loss of tax on his PAYE income—the PAYE deductions had already paid the tax on that. The loss HMRC had discovered was outstanding HICBC, and HICBC "was not 'income which ought to have been assessed to income tax'".

At paragraph 38 he acknowledged the connection between HICBC liability and income—you only owe HICBC if your income is over £50,000 (the threshold at the time of Wilkes; it is now £60,000)—but held that "(limited) connection with income cannot, however, render section 29(1)(a) of TMA 1970 applicable".

Issue (iii): No Rectification Under Inco Europe

HMRC's last argument was the most ambitious. Courts can, very rarely, "rectify" a statute under the principle in Inco Europe Ltd v First Choice Distribution [2000] UKHL 15—reading the statute as if it said what Parliament must have meant. Lord Nicholls in Inco identified three conditions. The court must be "abundantly sure" of (1) the intended purpose of the provision, (2) that the draftsperson and Parliament had failed to give effect to that purpose by inadvertence, and (3) the substance of the provision Parliament would have made.

Newey LJ rejected rectification at paragraph 46 because the first condition was not met—the court could not be "abundantly sure" that Parliament had ever intended HMRC to be able to make a discovery assessment for HICBC where no return had been filed. Parliament might simply not have addressed its mind to it. And at paragraph 49, he held the third condition also failed:

"A second objection to FA 2012 being 'rectified' is, in my view, that it is not possible to be 'abundantly sure' what Parliament would have done had it perceived there to be an error. It might have included in FA 2012 provision for section 29(1) of TMA to be amended along the lines proposed by Mr Yates. It is by no means inconceivable, however, that it could have adopted a different course. It could, for example, have deemed child benefit to be 'income' for the purposes of section 29 …, imposed a stand-alone assessment regime …, empowered HMRC to make regulations … or introduced a power to make 'simple' assessments such as subsequently arrived with FA 2016. It is noteworthy that FA 2022 does not amend section 29(1) in quite the way that Mr Yates propounded, but, rather, rewrites section 29(1)(a). In the circumstances, it appears to me that we cannot be 'abundantly sure' of even the 'gist or substance' of what would have been enacted."

— Newey LJ, HMRC v Wilkes [2022] EWCA Civ 1612, para 49

Months later, Parliament did exactly what the Court of Appeal said only Parliament could do—and did it retrospectively. Newey LJ closed his rectification analysis at paragraph 50: "were we to 'rectify' section 29 of TMA 1970 as HMRC propose, we would be engaging in judicial legislation, not discharging our interpretative function".

That is the doctrinal heart of the case. The court will not redraft a taxing statute to plug a hole. If Parliament wants the hole plugged, Parliament must plug it. And Parliament did.

Parliament's Response: Section 97 FA 2022

The Chancellor announced the response at the Autumn Budget on 27 October 2021—four months after the UT had handed down its decision in HMRC's favour at Wilkes. The legislation followed in the Finance Act 2022, enacted on 24 February 2022. Section 97 FA 2022 rewrote section 29(1)(a) TMA 1970.

The old wording referred to "any income which ought to have been assessed to income tax, or chargeable gains which ought to have been assessed to capital gains tax". The new wording, in force from FA 2022, says simply: "that an amount of income tax or capital gains tax ought to have been assessed but has not been assessed". The word HMRC had argued for in Wilkes—"amount"—is now in the statute.

The fix is general. It does not name HICBC. But the government's policy paper accompanying FA 2022 (quoted at paragraph 15 of the Court of Appeal judgment) made clear that the same problem applied to HICBC, gift aid clawback, and "certain pensions charges"—all of the step-7 stand-alone charges. Section 97(2) FA 2022 also removed regulation 9 of the Registered Pension Schemes (Accounting and Assessment) Regulations 2005, which had previously been the workaround for unauthorised pension payments charges.

For tax year 2021-22 onwards, the new section 29(1)(a) is treated as having always had effect. For earlier years, HMRC's pre-FA 2022 discovery assessments for HICBC, gift aid and the listed pensions charges are retrospectively validated—except where the assessment is not a "relevant protected assessment" under the savings provision in section 97(5).

The Savings Provision—Two Cumulative Conditions

This is the part most readers should pay attention to. Section 97(5) FA 2022 keeps the Wilkes defence alive only where both of these are true:

1. (a) The taxpayer gave notice of appeal under section 49 TMA 1970 against the assessment on or before 30 June 2021; AND
2. (b) on or before 30 June 2021, the validity of the discovery assessment was raised as an issue in the appeal (the statute says "an issue in the appeal is that the assessment is invalid", raised "whether by the appellant or in a decision given by the tribunal").

Both. Not either. A taxpayer who appealed in time but did not raise the discovery-validity question by 30 June 2021 is not protected. A taxpayer who raised discovery validity in principle but whose appeal was filed only after 30 June 2021 is not protected.

Section 97(7) softens limb (a) slightly: an appeal given late still counts as given by 30 June 2021 if the taxpayer requested HMRC's agreement to a late notice (or, by extension, applied to the tribunal for permission) on or before that date and the application was later granted. This is a technical deeming rule and unlikely to come up often.

There is also a separate strand of protection at section 97(6) and (8) for appeals that were already stayed by the tribunal, by party agreement, or notified by HMRC as suspended, before 27 October 2021. That was designed for the queue of HICBC appeals that had been parked behind Wilkes at the UT level. If your appeal was stayed before 27 October 2021, the stay protects you regardless of the savings limbs above.

The choice of 30 June 2021 was deliberate. That is the date the Upper Tribunal handed down its decision in Wilkes. After that date the Wilkes defence was on public notice. Parliament chose to protect only those taxpayers who had already raised the point by the time the UT had publicly confirmed it.

Who Can Still Use Wilkes—A Diagnostic

For most readers, this is the question that matters. The most useful thing this article can do is put you in the right bucket. There are four.

Bucket 1: Wilkes Still Helps You

Both conditions in section 97(5) are met. Your notice of appeal was filed on or before 30 June 2021 AND it raised the validity of the discovery assessment (in the appeal notice or in subsequent correspondence before that date).

This is the Fera fact pattern. In Fera v HMRC [2023] UKFTT 961 (TC), Mr Fera received HICBC discovery assessments on 15 March 2021 and lodged a formal appeal on 29 March 2021. HMRC argued that because his appeal letter did not specifically mention the Wilkes point (which had not yet been confirmed at UT level), he failed limb (b). The FTT disagreed—a formal appeal challenging the validity of the assessment was enough; the appellant did not need to articulate the precise Wilkes argument by 30 June 2021. Mr Fera was protected. (Practitioner commentary records that HMRC sought permission to appeal Fera further; the position should be checked with a tax adviser before relying on it.)

Bucket 2: Stay-Behind-Wilkes Protection

Your appeal was stayed by the tribunal, by party agreement, or notified by HMRC as suspended pending Wilkes, before 27 October 2021. Section 97(6) and (8) protect you.

This is a narrow group. If you are in it, you will have had correspondence from HMRC or the tribunal at the time confirming the stay. Pull those papers.

If your appeal has been sitting in stay since 2021, expect HMRC to write to you proposing to lift the stay now that the Court of Appeal has spoken. What you receive next depends on your bucket. If you are firmly in Bucket 2, the case proceeds with the Wilkes point intact. If HMRC concludes you are actually in Bucket 3 or 4 (because limb (b) was never engaged, or the stay arose differently), expect an application to strike out or a settlement offer focused on the penalties only.

Bucket 3: Appealed In Time, But Did Not Raise Validity

You appealed by 30 June 2021, but your appeal only raised penalty grounds, "I had a reasonable excuse", or "I disagree with the amount"—and never said anything that could be read as challenging the discovery itself. Limb (b) fails. Section 97(5) does not protect you. The assessment is "validated" by FA 2022 and the Wilkes defence is closed.

This is the dangerous middle case. The Fera FTT took a generous view of what counts as putting validity in issue. If your original 2021 appeal letter said anything that could be construed as challenging the assessment's validity—even a general "I don't accept this assessment"—that is worth showing to a tax adviser. The line between Bucket 1 and Bucket 3 is genuinely contestable on the facts.

Bucket 4: Appealed After 30 June 2021, Or Not Yet Appealed

You appealed after 30 June 2021, or you have not appealed yet. Limb (a) fails. Wilkes is closed.

This is by far the largest bucket today. The 30 June 2021 cut-off is now nearly five years in the past, and any new HICBC discovery assessment for an old year (the years for which the new section 29(1)(a) was not always-in-force—anything before 2021-22) is caught by the retrospective fix without limb (a) protection. Kensall v HMRC [2023] UKFTT 11 (TC) is the cautionary tale: Mr Kensall received discovery assessments on 26 April 2021 but appealed after 30 June 2021. The FTT stayed his appeal behind Wilkes in October 2021, but that did not help him. The savings provision turns on when the appeal was given, not what the tribunal later did with it. Mr Kensall's assessments stood—but his failure-to-notify penalties were cancelled on reasonable excuse grounds, which is a separate fight (see Bucket-3-and-4 advice below).

The practical first step in either Bucket 3 or Bucket 4 is to pull the original notice of appeal and read what it said. If your case is borderline between buckets, that document does the work.

If Wilkes Doesn't Help: Other Discovery-Validity Arguments

The FA 2022 fix repaired section 29(1)(a), but it did not touch the rest of the discovery-assessment landscape. Several routes remain open. For the full procedural picture, see our discovery assessments hub.

The hypothetical-officer test under section 29(5) TMA. Where the taxpayer has filed a return (which Mr Wilkes had not), HMRC must show that the hypothetical officer—aware of the information actually disclosed in the return—could not reasonably have been expected to be aware of the insufficiency by the end of the normal enquiry window. Charlton and HMRC v Tooth [2021] UKSC 17 define that ground. Our Tooth v HMRC analysis walks through the test.

The extended time-limit thresholds under section 36 TMA. HMRC's reach back depends on the taxpayer's behaviour: 4 years on a plain mistake, 6 years on carelessness, 12 years for offshore matters, 20 years on deliberate behaviour or failure to notify. If HMRC's assessment is older than 4 years, they have to justify the longer window. That can be challenged on the facts.

The burden of proof on validity. Burgess v HMRC establishes the split burden: HMRC must prove the assessment was validly made; the taxpayer then bears the burden under section 50(6) TMA of showing the assessment is excessive. Recent cases including Brown v HMRC (FTT 2024) and Harte v HMRC (UT 2026) confirm the rigour: HMRC must prove each insufficiency separately, not as a global package. If HMRC have not put up the evidence on validity, that is a discrete ground.

Failure-to-notify reasonable excuse under section 7 TMA. This is not a challenge to the assessment itself—it is a defence to the failure-to-notify penalty. But for HICBC cases it has been an important survival route. See our reasonable excuse guide and our Perrin v HMRC analysis.

Each of these is technical, and each turns on the documents in your file. The point is that "the FA 2022 fix has closed Wilkes" does not mean "you have no discovery-validity arguments". It means Wilkes is closed.

How Wilkes Fits With Tooth

The two leading discovery-assessment case analyses on this site sit at different parts of section 29. They are worth reading together.

Wilkes is about which target section 29(1)(a) can be used for. The answer Newey LJ gave was: only income that ought to have been assessed to income tax. Step-7 stand-alone charges like HICBC are not income. Gateway (a) does not open at all. The case was decided under the pre-FA 2022 statute, and FA 2022 has now closed that gap—but the gap is closed only for taxpayers who fall outside the section 97(5) savings provision.

Tooth is about what counts as a valid discovery once a gateway has opened. The Supreme Court held in HMRC v Tooth [2021] UKSC 17 that "deliberate" inaccuracy under section 29(4) means intent to mislead, that the return must be read as a whole, and that staleness is not a free-standing defence. The conditions in section 29(2) to (5)—the hypothetical-officer test, the protection for taxpayers who have filed full returns—are still live battlegrounds.

Most appellants reading this article will need Tooth-style arguments more than Wilkes-style arguments, because Wilkes is mostly closed. Read both analyses together if you have a discovery-assessment dispute: they cover different parts of the same statute and yours may turn on either or both.

Penalties Are A Separate Fight

Most readers will have failed to notify HMRC under section 7 TMA, because they did not know HICBC applied to them and did not file a return. That is the basis for HMRC's separate "failure to notify" penalty. It is a different issue from the discovery-validity question above—but it sits in the same envelope as the assessment, and the reasonable excuse defence to the penalty is where most HICBC appellants now win their best ground.

Even if the discovery assessment stands, the failure-to-notify penalty under Schedule 41 FA 2008 is a separate appeal on separate grounds. The FA 2022 fix did not touch the penalty regime at all. Reasonable excuse remains the live defence. The penalty percentages depend on behaviour and disclosure: roughly 0%–30% of the potential lost revenue for unprompted careless disclosure (the most favourable category, often achievable for taxpayers who came forward after a nudge letter), 15%–30% for prompted careless, and up to 70%–100% for deliberate or deliberate-and-concealed behaviour. A taxpayer with a reasonable excuse owes no penalty at all.

For HICBC specifically, the most productive line of cases has been the run of taxpayers who did not know HICBC existed: Belloul, Jacques, Hill and Brown (the HICBC Brown, not the discovery Brown). They sit alongside losers like Ramsdale and Legg. The line is fact-sensitive—the question is what HMRC told the taxpayer, what was on the GOV.UK guidance the taxpayer would have seen, and whether the taxpayer's response was reasonable in the circumstances. For the full case law see our HICBC hub, and for the broader reasonable-excuse framework see Perrin v HMRC and our reasonable excuse guide.

Kensall is the cautionary precedent on the assessment side—but on the penalty side it was a partial win. The assessment stood; the penalties were cancelled. If you are in Bucket 3 or Bucket 4, the penalty appeal is often the more winnable half of the case.

What To Do Now

If you have an HICBC discovery assessment in front of you, work through the following in order. The whole Wilkes question turns on two cumulative conditions in section 97(5) FA 2022: you needed an appeal on file by 30 June 2021, AND that appeal needed to put discovery-validity in issue by the same date. Steps 1 and 2 are how you find out whether you meet both.

1. Check the date of appeal (limb (a)). Open the original notice of appeal you sent to HMRC. Before or after 30 June 2021? If after, limb (a) fails, Wilkes is closed, and you can skip to step 4.
2. Check what the appeal raised (limb (b)). Find the appeal first. If you appealed online, log into your HMRC Personal Tax Account—appeals you submitted appear under your messages and tax-history. If you appealed by post, look for your saved copy of a letter to HMRC dated 2021 or earlier. Many HICBC appeals were filed on form SA370 (the penalty appeal form) or by freeform letter. Read it carefully. You are looking for words that challenge the validity of the assessment—anything along the lines of "I do not accept this assessment", "HMRC has no power to make this assessment", "the assessment is invalid", "section 29 does not apply". Wording that only challenges the amount ("the figures are wrong") or only the penalty ("I had a reasonable excuse", "I did not know") does not raise validity. If the appeal raised validity in any form, Bucket 1 may apply. If it raised only penalty or quantum, limb (b) fails and Bucket 3 applies. Both limbs must be met; one is not enough.
3. Pull the assessment itself. What does it cite? Section 29(1)(a)? Which tax year? For tax year 2021-22 onwards the rewritten section 29(1)(a) is always-in-force, so Wilkes is irrelevant—the assessment is valid on its face. For earlier years the FA 2022 fix is what does the work, and the savings provision is the question.
4. If Wilkes is closed, work the other grounds. The hypothetical-officer test under section 29(5), the time-limit thresholds under section 36 TMA, the Burgess burden of proof on validity, and the penalty appeal under reasonable excuse. See our grounds of appeal guide for how to structure each.
5. Get focused advice. Wilkes turns on documents—what your appeal notice actually said—and that is the kind of question best put to a tax adviser who can read the file with you.

Where To Get Help

If your case is in Bucket 3 or Bucket 4, the discovery-validity argument is largely closed and you will need to look at the other grounds and the penalty appeal. That is a technical exercise. Realistic options:

• A Chartered Tax Adviser (CTA) or accountant who handles HMRC disputes
• A barrister you instruct through public access (direct access)—you do not need a solicitor to brief a public-access barrister
• If your income is low, the tax charities TaxAid and Tax Help for Older People help free of charge
• Advocate can find a barrister to take your case pro bono

If you have only 30 days from an HMRC decision letter to lodge a new appeal, do not let that clock run out while you read more articles. Lodge the appeal first, work the merits later.

Key Legislation And Resources

The Judgment

• HMRC v Wilkes [2022] EWCA Civ 1612 — Court of Appeal, 7 December 2022; Newey LJ (lead), Baker LJ, Arnold LJ. HMRC's appeal dismissed.
• HMRC v Wilkes [2021] UKUT 150 (TCC) — Upper Tribunal, 30 June 2021; Falk J and Herrington UTJ. The date of the UT judgment is the cut-off used by section 97(5) FA 2022.
• Wilkes v HMRC [2020] UKFTT 256 (TC) — First-tier Tribunal, 15 June 2020; Judge Citron and Ms Shillaker. Appeal allowed.

Legislation

• Section 29 TMA 1970 — discovery assessments. Subsection (1)(a) was rewritten by FA 2022.
• Section 7 TMA 1970 — duty to notify chargeability.
• Section 8 TMA 1970 — notice to file.
• Section 36 TMA 1970 — extended time limits.
• Section 49 TMA 1970 — appeal procedure.
• Section 50 TMA 1970 — burden of proof on quantum.
• Section 23 ITA 2007 — seven-step income tax calculation.
• Section 30 ITA 2007 — step-7 miscellaneous charging provisions.
• Sections 681B–681H ITEPA 2003 — HICBC charging provisions, inserted by Schedule 1 FA 2012.
• Section 97 FA 2022 — retrospective amendment of section 29(1)(a) TMA 1970, with savings provision at section 97(5).
• Schedule 41 FA 2008 — failure-to-notify penalty.

Key Cases

• Knibbs v HMRC [2019] EWCA Civ 1719 — the section 23 ITA 2007 calculation; step-7 stand-alone charges; the architectural point adopted in Wilkes.
• Inco Europe Ltd v First Choice Distribution [2000] UKHL 15 — the three-condition rectification principle; Lord Nicholls.
• HMRC v Tooth [2021] UKSC 17 — discovery assessments under section 29(4)/(5); deliberate inaccuracy and staleness.
• Wiseman v HMRC [2020] UKFTT 383 (TC) — a different FTT panel that took HMRC's preferred reading of section 29(1)(a). Effectively overtaken by the Wilkes UT and Court of Appeal decisions: no longer good law on the section 29(1)(a) point.

GOV.UK Guidance

• High Income Child Benefit Charge — the HMRC explainer for taxpayers.
• HMRC Compliance Handbook on discovery assessments (CH51000 onwards) — HMRC's internal manual on the discovery power.
• HMRC Appeals, Reviews and Tribunals Guidance (ARTG) — the appeal process.

On This Site

• High Income Child Benefit Charge — the topical hub on HICBC liability, the calculation, the notification trap, and the reasonable excuse case law.
• Discovery assessments — the procedural hub: section 29 conditions, time limits, hypothetical-officer test, the Burgess burden.
• Tooth v HMRC: deliberate inaccuracy — the prior case analysis on section 29; Wilkes and Tooth sit at different parts of the same statute.
• HMRC enquiries and closure notices — the wider enquiry landscape, including discovery as the back-stop.
• Perrin v HMRC: reasonable excuse — the four-step test that runs the failure-to-notify penalty appeal.
• What is a reasonable excuse? — the framework, including the HICBC case law line.
• Writing grounds of appeal — how to plead discovery-validity grounds in practice.
• Late appeal to the tax tribunal — the Martland test, relevant if your section 97(5) appeal date is itself in dispute.
• After your tax tribunal decision — written reasons, the 14-day window, and the route up to the Upper Tribunal.
• Upper Tribunal appeal — the procedural companion to Wilkes's journey through UT and CoA.
• Edwards v Bairstow: error of law — the gateway to appellate review of factual findings, which Wilkes did not need.

This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax adviser, accountant, or solicitor.