CS v Revenue and Customs (TC) (Tax credits and family credit : couples and joint claims) [2015] UKUT 407 (AAC)

UKUT-AAC
CS v Revenue and Customs (TC) (Tax credits and family credit : couples and joint claims)
[2015] UKUT 407 (AAC) · 2015-07-17
[1]The appellant is a married person. She has been so at all material times. She has two children. She submitted a claim for tax credits which was received on 9 July 2009. It was a single claim under section 3(3)(b) of the Tax Credits Act 2002 (the “2002” Act”). According to a submission prepared on behalf of the respondent in relation to this appeal to the Upper Tribunal, she had previously been claiming tax credits in a joint capacity with her husband.[2]The appellant’s single claim was accepted by the respondent and an initial award, presumably under section 14 of the 2002 Act, was made. The award was in the sum of £5,653.00 in relation to child tax credit and £3,814.25 in relation to working tax credit. At the end of the tax year the respondent calculated her final entitlement to tax credits for the 2010‑2011 tax year and made an entitlement decision. There was only a very slight variation between the amount she was found to be entitled to and the amount of the initial award. Presumably, the latter decision was taken under section 18 of the 2002 Act.[3]The appellant’s claim was subsequently selected for a review. It appears that the selection of the claim for a review was triggered by the respondent discovering “through the HMRC systems” information indicating that her husband was living with her at her address. The respondent, as a consequence of discovering this, (though it is the appellant’s position that the respondent already knew he was living at her address) wrote to her, on 15 February 2012, asking her to telephone to discuss matters. It transpires that there were, in fact, two telephone conversations between the appellant and an HMRC officer, as a result of the sending of that letter and that they took place on 22 February 2012 and 24 February 2012 respectively. Thereafter, the respondent decided, on 27 February 2012, that there was no entitlement to tax credits from 6 April 2010 to 5 April 2011. Presumably, that decision was taken under section 19(3) of the 2002 Act. The appellant decided to appeal against that decision to the First‑tier Tribunal (F‑tT). In her written appeal she said that she had been honest with HMRC and suggested, in effect, that it was HMRC who had told her, in light of her circumstances as explained to them, that she should make a single claim. She suggested that the respondent might wish to “look into the original call I made”. She was clearly asserting, in this context, that she had had a telephone conversation with an HMRC officer, in which she had discussed her particular situation, prior to making her single claim. She added:
“I’ve told you everything – that my ex‑partner was still living at the family address and he will be until he gets into a financial state that he can afford to move out.”
[4]The appellant’s notice of appeal is dated 13 March 2012. Very shortly prior to lodging her appeal she and her husband made a joint claim for tax credits which was subsequently accepted and paid.[5]On 11 December 2012 HMRC wrote to the appellant once again. The letter suggested some examples of further evidence the appellant might like to submit in the event of her continuing to dispute the decision under appeal. The letter asked if she did wish to continue with the appeal. It informed her that she “must tell us how you wish to proceed”, the options suggested to her being to continue to pursue her appeal or to “settle” (effectively withdraw) that appeal. The appellant replied. She said she wished to proceed with her appeal. She explained that there had been no legal separation but that (presumably during the relevant tax year) she and her husband had been “living jointly” at the same address but “were living separate lives”. The F-tT, though, did not know anything of this reply, it having been informed by the respondent that she had not replied at all.[6]The appellant did not submit any further documentary evidence. The respondent’s submission to the First‑tier Tribunal[7]In light of the appellant having lodged her appeal, the respondent sent a written submission about the appeal to the First‑tier Tribunal. It was dated 7 October 2013. There were some shortcomings with that submission and its attachments. Some of those were apparent at the time when I granted the appellant permission to appeal to the Upper Tribunal. Others have only become apparent as a result of the respondent’s helpful submission to the Upper Tribunal. I shall set them all out below.[8]The first difficulty is that the submission did not make any reference to any legislation at all. It did not, therefore, indicate the legal provision which it says underpinned its decision of 27 February 2012 nor those which it said underpinned any of the earlier decisions. I have suggested, above, what I think are likely to have been the various sections of the 2002 Act which the respondent was purporting to apply at various stages. However, it is important to stress that that is simply conjecture on my part. It is not based on any positive indication by the respondent. So, the F‑tT had no indication from the respondent as to the legal basis for the decision under appeal.[9]Another difficulty is that the submission did not contain any documentation relating to the appellant’s single claim. It did not, for example, contain a copy of her claim form so it was not apparent what she had said when making her claim or whether she had provided any additional information to supplement the answers she would have provided to the questions on the standard claim form.[10]Another difficulty is that the submission did not contain any information about the previous tax credit claim history in relation to the appellant or her husband. I am only aware of the fact that there had been a joint claim, prior to the appellant lodging her single claim, because that is indicated in the submission prepared on behalf of the respondent for the purposes of the appeal to the Upper Tribunal.[11]Another difficulty is that the submission did not contain any records of any telephone calls made by the appellant to HMRC. Nor did it indicate whether or not any attempt had been made to locate any written notes of or any recording of any such telephone calls. That is despite the fact that the appellant clearly made reference, in her written appeal, to a telephone conversation in the course of which she appeared to suggest she had been told, by an HMRC employee, prior to making her single claim, that in her circumstances that was what she should do.[12]Another difficulty is that the submission did not contain any copies of any documentary evidence which had triggered the review and which had seemingly indicated that the appellant was living at the same address as her husband. In fact, the appellant has never disputed that, so in one sense it might be thought it does not matter very much, but it does seem to me that, if only for background purposes, such evidence ought to have been included.[13]Another difficulty, perhaps the most concerning, is that the submission indicated, quite clearly, that the appellant had not responded to the letter of 11 December 2012 referred to above. In fact, as noted above, she had done so.[14]The respondent, in the submission, asserted that the appellant had failed to provide “the evidence requested” (presumably that being a reference to the letter of 11 December 2012 and the claimed failure to reply). It was stated the respondent had drawn adverse inferences against the claimant in light of that. The F-tT was, in effect, invited to do the same thing. The respondent did not stop there, though, and went on to ask that the appeal be struck out on the basis that the appellant “has not made any contact regarding how she wishes to proceed with her appeal or provide the information requested”. Again, that is to be taken as a reference to the letter of 11 December 2012 and the alleged failure to reply. The First‑tier Tribunal’s decision[15]The appellant did not seek an oral hearing. Nor did the respondent. The F-tT does not appear to have considered whether to strike out the appeal but went ahead to decide it on the basis of the documentation before it. It dismissed the appeal and, on 2 June 2014 (the date of its papers consideration) issued a decision notice to that effect. Thereafter, upon request, it produced its statement of reasons for decision (statement of reasons).[16]The F‑tT explained its decision to proceed rather than to adjourn for an oral hearing in this way:
“[The appellant] either declined or did not respond to an invitation to attend a hearing to give oral evidence. It followed that neither party objected to the matter being decided without a hearing. I considered that I had sufficient evidence to enable me properly to decide the matter in that way. I therefore determined the appeal on the papers.”
[17]The F‑tT did not appear to consider the possibility of adjourning for any further evidence to be obtained or for any further information, explanation or clarification to be provided. Certainly there is no reference to any such consideration in the statement of reasons. It made reference to the previous history of decision‑making as outlined above and found, specifically, and inaccurately as it has turned out, that the appellant had failed to respond to the letter of 11 December 2012. It then sought to explain, in a passage from paragraphs 12 to 20, why it had decided to dismiss the appeal. It made reference to the facility of making a joint or a single claim and the definition of “couple” as contained within section 3 of the 2002 Act. It noted that the appellant had been married to her husband and living at the same address as him throughout the relevant period (such was not in dispute). It suggested that this meant there was “a prima facie case that the appellant was a member of a couple” and that, therefore, there was an evidential burden upon her to show that she was separated from him such that she was eligible to make a single claim. It noted there was no record of the telephone conversation which had taken place on 24 February 2012 but it said that it inferred that, during this conversation, she had indicated there were difficulties in her marriage but had conceded that her husband was still living at the same address as her. It added it was apparent that if she had endeavoured to justify her claim she had been unable to successfully do so. The F‑tT then noted that, in her written appeal, the appellant had not said that she and her husband “were separated whilst living under the same roof” but had merely asserted that he would “be moving out at some unspecified time in the future”. It did note that her husband was referred to as being her “ex‑partner”. It expressed the view, though, that the fact that they had been living under the same roof for what it thought to be an extended period tended to suggest that they were unlikely to separate permanently such that a single claim would be legitimate. The F‑tT then referred to the subsequent joint claim which, it said, “effectively contradicted any suggestion that they were separated in circumstances in which the separation was likely to be permanent at the material time”, and also said that the reasonable inference to be drawn from the fact that the appellant had not responded to the letter of 11 December 2012 was that “she did not have evidence to support her case”. The appeal to the Upper Tribunal[18]I granted permission to appeal because I thought it arguable that the F‑tT had erred in law in proceeding to determine the appeal without seeking further evidence and clarification given the various shortcomings which were then apparent to me in the respondent’s submission to it. I also thought it may have erred in failing to adequately explain why it had not adjourned for an oral hearing bearing in mind these difficulties and the possibility that the appellant would have been able to provide relevant oral evidence regarding the terms of her relationship with her husband.[19]Having granted permission I received a written response from Ms E Collins on behalf of the respondent. I am grateful to Ms Collins for her fair and helpful submission. She supports the appeal to the extent that she invites me to set the F‑tT’s decision aside and to remit to a new and differently constituted F‑tT. She seems to suggest, though this is not said in terms, that the decision under appeal was, as I suspect, one made under section 19(3) of the 2002 Act. She accepts that the respondent’s submission to the F‑tT was inadequate in that it lacked information as to the decision making powers HMRC had exercised and it misled the F‑tT in wrongly stating that the appellant had not responded to the letter of 11 December 2012 in circumstances where, in fact, she had. Ms Collins also suggests that it would have been “prudent” for the F‑tT to have adjourned and listed the appeal for an oral hearing bearing in mind the respondent’s poorly assembled documentation. Ms Collins does not, though, invite me to remake the decision myself. This is because she says that the appellant, in a subsequent letter of 16 June 2014 which she had sent to the F‑tT after it had made its decision, had suggested that she and her husband were seeking to rebuild their relationship and that, in her grounds of appeal to the Upper Tribunal, she had indicated something similar. She contended, in effect, that that amounted to a concession on the part of the appellant that, for at least a part of the relevant tax year, she and her husband were still a couple.[20]Ms Collins has attached a number of documents to her submission including notes of the telephone conversations of 22 February 2012 and 24 February 2012 and the appellant’s reply to the letter of 11 December 2012.[21]The appellant’s reply to Ms Collins helpful response does not take matters very much further. It consists for the most part of assertions to the effect that she did not say certain things she is recorded as having said in the two telephone call records. The Upper Tribunal’s analysis[22]The F‑tT erred in law. It did so by proceeding on the basis of woefully inadequate documentation and a woefully inadequate submission which failed to indicate the decision making powers upon which the respondent had sought to rely. As a minimum, if it were not simply to throw out the respondent’s case as being not made out, it ought to have adjourned to enable the respondent to provide further documentation and to specify the decision making powers upon which it did rely. I also conclude that, in the circumstances, and given the lack of any meaningful documentary evidence at all, notwithstanding the appellant’s indication that she was content with a paper’s decision, it should have adjourned for an oral hearing. Given the paucity of other information before it, its ability to make any meaningful findings regarding the nature of the appellant’s relationship with her husband, at the appropriate time, was very significantly compromised. There may well have been other errors in the approach taken by the F-tt but in view of what I have said already, it is not necessary for me to deal with them. Remaking the decision[23]One of the most striking things about this case is that the respondent, quite simply, did not provide the F-tT with any evidence at all to support its assertions. It is now, in effect, accepted on behalf of the respondent that the F-tT was dealing with a decision made under section 19(3) of the 2002 Act. Thus, the respondent was, after an enquiry under section 19, making a decision which was altering a final decision under section 18. In those circumstances it was for the respondent to demonstrate that that final decision under section 18 had been the wrong one. The respondent could hardly demonstrate that without producing evidence. Nevertheless, nothing in the bundle it did produce for the F-tT other than the appellant’s own written appeal, which supported her case not the respondent’s, could properly be described as evidence. So, on the material before it, there was simply no basis for the F-tT to find in the respondent’s favour. I do note the reason Ms Collins advances for me to remit rather than remake. However, the wording in the letter and the grounds of appeal to the Upper Tribunal amounts, in my view, to the appellant contending there was, as at the material time, no more than a hope that they would be able to reconcile. What she said did not, it seems to me, amount to any acceptance that the requirements for a single claim to be made were not met. Accordingly, I go on to remake the decision and resolve matters in the appellant’s favour. Conclusion[24]Finally, I allow the appellant’s appeal, set aside the F‑tT’s decision and remake the F‑tT’s decision in the terms set out above. ( Signed on the original) M R Hemingway Judge of the Upper Tribunal Dated: 17 July 2015

Cited in 1 later judgment