Barentz (HM Inspector of Taxes) v Whiting
| Jurisdiction | England & Wales |
| Judgment Date | 19 January 1965 |
| Date | 19 January 1965 |
| Court | Chancery Division |
HIGH COURT OF JUSTICE (CHANCERY DIVISION)-
COURT OF APPEAL-
Income Tax - Personal allowances - Person taking charge of widower's or widow's children - Whether residence with claimant a condition of relief - Income Tax Act, 1952 (15 & 16 Geo. VI & 1 Eliz. II, c. 10), Section 214.
The Respondent, a widow, claimed relief from Income Tax for the years 1957-58 to 1960-61 under Section 214, Income Tax Act, 1952, in respect of A, a woman employed by her for five mornings a week to perform duties in connection with her children. No female relative of the Respondent or her late husband was available to look after the children. A was not resident with the Respondent.
On appeal against assessments to Income Tax under Schedule D made to disallow these claims (which had originally been admitted), it was contended for the Respondent (inter alia) that under Section 214 in the case of a relative residence with the claimant was required but not employment, and that in the case of another female person employment was required but not residence. For the Crown it was contended (inter alia) that the fact that A was not resident with the Respondent disqualified her from obtaining an allowance under Section 214. The Special Commissioners rejected the Crown's contention on this point, but found that A had not the charge and care of the children except in 1957-58.
Held, that in order to be entitled to relief under Section 214 in respect of a person employed who has the charge and care of children, the claimant must prove that the person was resident with him.
Stated under the Income Tax Act, 1952, Section 64, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the High Court of Justice.
1. At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held on 17th October, 1962, Mrs Doris Whiting (hereinafter called "the Respondent") appealed against the following additional assessments to Income Tax made upon her under Schedule D:
Year |
Amount of assessment |
||||||
1957-58 |
… |
… |
… |
… |
… |
… |
£60 |
1958-59 |
… |
… |
… |
… |
… |
… |
£60 |
1959-60 |
… |
… |
… |
… |
… |
… |
£60 |
1960-61 |
… |
… |
… |
… |
… |
… |
£75 |
2. These additional assessments were made upon the Respondent pursuant to the provisions of Section 41 of the Income Tax Act, 1952, on the ground that she had received relief under Section 214 of that Act, (which relates to claims to relief in respect of a person employed for the purpose of having the charge and care of a widower's or widow's children, or acting as his or her housekeeper), to which she was not entitled.
3. The questions at issue in this appeal were:
(a) whether a Mrs Allen, a female person who was employed by the Respondent for the years of assessment for which the additional assessments were made, was so employed for those years for the purpose "of having the charge and care of any child" of the Respondent within the meaning of those words in Section 214 of the Income Tax Act, 1952; and
(b) if so, whether the Respondent was or was not debarred from being entitled to relief under that Section, by reason of the fact that Mrs Allen was not resident with her within the meaning of the word "resident" in that Section.
4. Evidence was given before us by the Respondent. The facts found by us are set out in paragraphs 5 to 14 below.
5. The Respondent is the widow of the late Arthur Whiting who died on 6th July, 1957. She has two daughters, Heather Elaine (hereinafter referred to as "Heather") and Lynette Rosemary (hereinafter referred to as "Rosemary"). Heather was born on 29th July, 1948, and Rosemary was born on 18th March, 1953.
6. The Respondent was and is a director and secretary of the Castle Shoe Co., Ltd (hereinafter called "the company"), of Macclesfield, which has a mill, and has worked for the company since 1935. Before the children were born she worked full-time for the company, but subsequently for mornings only on Monday to Friday (inclusive) in every week.
7. The Respondent took over from her late husband a retail sports outfitters ship at Macclesfield. This shop is managed by her brother. Since her husband's death she has normally called at this shop to see to the post in the morning, before going on to the company's mill. She has also normally been at the shop in the afternoon, except when there was a directors' meeting at the mill. On Saturdays she has spent as much time as she could at the shop.
8. The Respondent has at no time had any female relative of hers or of her late husband available to look after her children. Mrs Allen, who was not a relative, first came to her to look after them in June, 1953, when Rosemary was three months old. She then took the place of a nurse the Respondent had employed previously. Mrs Allen had been trained to look after children and had herself been a hospital nurse.
9. Since 1953 Mrs Allen has worked at the Respondent's house daily from 9 a.m. to 1 p.m., but not on Saturdays and Sundays. Initially Mrs Allen during those hours took complete charge of Rosemary and also looked after Heather, who was not then at school. Mrs Allen had no other employment.
10. When the Respondent's husband died in July, 1957, Rosemary was four and not yet at school. Heather was nearly nine and went to a day school in Macclesfield. Rosemary started going to school in January, 1958. Until then Mrs Allen when at the Respondent's house looked after Rosemary. She also tidied Heather's bedroom and did Heather's washing and whatever was necessary for her. The Respondent herself took Heather, and as from January, 1958, both children, to school.
11. When Rosemary started to go to school Mrs Allen did not at first wish to continue to work for the Respondent because there would in term time normally be no children at home to look after. She agreed, however, to stay on the basis that she would be able to look after them if they were ill, and when they were home from school in the holidays. There were times when the children could not go to school-Rosemary was not long ago ill for six or seven weeks. The Respondent had to have someone available to look after the children when they were ill and during holidays. She could not leave those times unprovided for. In the holidays Mrs Allen got the children up, gave them breakfast, prepared their lunch and looked after them until the Respondent returned at lunch time. When the children were at school, Mrs Allen would during the morning wash up, make their beds, and sometimes prepare their lunch or evening meal in advance. She did their washing (but not the Respondent's) mainly on Mondays, which would take all morning. The ironing would take another morning. She also tidied their bedrooms. She did not supervise their homework but she was very interested in all the children did, and very attached to them. She did not do the rough work in the house-the Respondent had to do this herself.
12. Mrs Allen resided and slept at her own home about 11/4 miles away from the Respondent's house. After the death of the Respondent's husband in July, 1957, Mrs Allen was willing to have Rosemary at her home in the afternoon when she could, so that the Respondent could be free to go to the shop. Sometimes the Respondent took Rosemary with her to the shop. She had to take each day as it came, and her hours away from home varied. As the children have grown older, she has been able to stay longer at the shop, but she has always had to fit in with what could be arranged for the children. The children often stayed with the Respondent at the shop after school had finished, until she was ready to return home. At the time when the appeal was heard the Respondent had recently been leaving home before 9 a.m. and getting back between 4.30 and 6.30 p.m., Mondays to Fridays. Until a few months previously the Respondent had collected Rosemary from school, but more recently Rosemary had been coming to the shop and going home from there either with the Respondent or alone by bus.
13. Mrs Allen receives a weekly wage of £3 0s.8d. from which 8s. 8d. is deducted for National Insurance. The wage is calculated roughly by reference to the number of hours which Mrs Allen works. If she takes the children to her house in the afternoon she is also paid hourly for that. She has two weeks' holiday with pay in the summer and is paid for Bank Holidays. The Respondent herself has two weeks' holiday each summer, the children then going away with her. The Respondent has tried to arrange for her holidays and those of Mrs Allen to coincide. Mrs Allen herself has a daughter who was born in 1943.
14. For the years of assessment 1957-58 to 1960-61 inclusive, the Respondent claimed in her Income Tax returns allowances under the heading
Housekeeper Or Person Looking After Children
in respect of Mrs Allen and had obtained such allowances. Reference is made in the wording on the return forms immediately under that heading to
some other female person resident with and employed by [a widow], either as housekeeper or for the purpose of having the charge and care of any child [of hers] for whom child allowance is given.
Copies of the relevant parts of these Income Tax returns are attached to and form part of this Case(1)
15. It was contended on behalf of the Respondent:
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A. As to question (a) referred to in paragraph 3:
(2) that the purpose of Mrs Allen's employment during the relevant years of assessment was the purpose "of having the charge and care of" Rosemary and/or Heather within the meaning of those words in Section 214 of the Income Tax Act, 1952;
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(3) that the evidence showed:
(i) that Mrs Allen did in fact have the charge and care of the children during her hours of employment,
(ii) that this was the purpose of the employment even when both children were at school.
B. As to question (b) referred to in paragraph 3:
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(2) that the provisions of Section 214 of the Income Tax Act, 1952...
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