HM Revenue and Customs v Fenton

JurisdictionEngland & Wales
CourtChancery Division
JudgeMR JUSTICE RICHARDS
Judgment Date17 June 2010
Neutral Citation[2010] EWHC 2000 (Ch)
Date17 June 2010
Docket NumberCase No: CH/2010/APP/0089

[2010] EWHC 2000 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand

London WC2A 2LL

Before: Mr Justice Richards

Case No: CH/2010/APP/0089

Between
Her Majesty's Revenue and Customs
Claimant/Respondent
and
Michael Fenton
Defendant/Appellant

No representation provided

MR JUSTICE RICHARDS
1

This is an appeal by way of case stated under Regulation 22 of The General Commissioners (Jurisdiction and Procedure) Regulations 1994. Whilst those regulations have been revoked, under transitional arrangements they continue to apply to the decision under appeal.

2

By their decision dated 24 March 2009 the General Commissioners upheld the claim of Michael Fenton to the repayment of class 3 voluntary national insurance contributions paid during three years, from 6 April 2003 to 5 April 2006, totalling £1,150.40. The Commissioners for Her Majesty's Revenue and Customs (“HMRC”) appeal against this decision.

3

Mr Fenton has not appeared at this hearing, but he has asked the court to take into consideration comments which he has sent in writing. The points which he makes arise in any event on the consideration of this appeal and are, I hope, addressed by this judgment without needing further specific reference to them.

4

The national insurance system at the relevant time was so far as relevant governed by the Social Security Contributions and Benefits Act 1992 (“the 1992 Act”) and the Social Security Contributions Regulations 2001 (“the 2001 Regulations”). The premise underlying the national insurance system is that contributions will secure particular benefits. The relevant benefits in this case included the basic state pension and bereavement allowance. The maximum amount of benefits would be secured only by contributions made over a specified number of years, called qualifying years.

5

Class 3 contributions entitled a male contributor to a full basic state pension if contributions were made for 44 qualifying years. The rules for the entitlement to a full bereavement allowance are more complex, but broadly speaking the more qualifying years’ contributions paid, the higher the percentage of the allowance which became payable. A person may in certain circumstances make voluntary contributions with a view to securing benefits, but subject to certain restrictions contained in Section 14 of the 1992 Act and Regulation 49 of the 2001 Regulations (referred to as precluded class 3 contributions).

6

On application by the contributor precluded class 3 contributions must be refunded (see Regulation 56 of the 2001 Regulations). Contributions must also be refunded if they have been paid “in error”, and application for their repayment is made by the contributor (see Regulation 52 of the 2001 Regulations). Regulation 52(9) defines error as follows:

“In this regulation “error” means, and means only, an error which:

(a) is made at the time of the payment; and

(b) relates to some past or present matter.”

7

Mr Fenton was made redundant in October 2002. He was informed that he did not have enough qualifying years to qualify for a full basic state pension, but in literature sent with his pension forms he was informed that he could pay voluntary class 3 contributions to improve his future pension and bereavement allowance. He decided to pay voluntary class 3 contributions in order to improve his entitlement to the basic state pension. His own understanding was that he had paid sufficient to be entitled to a full bereavement allowance. He therefore paid the contributions to which this appeal relates.

8

In May 2006 the government announced a number of proposals to reform the national insurance system, including the equalisation between men and women of the number of qualifying years required to secure the maximum basic state pension for those retiring after 6 April 2010. The maximum number of years for men would be reduced to 30. These changes were effected by the Pensions Act 2007.

9

In September 2006 Mr Fenton received a letter from HMRC explaining these changes, from which it was clear that he...

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2 cases
  • Bonner and Others v HM Revenue and Customs
    • United Kingdom
    • Upper Tribunal (Tax and Chancery Chamber)
    • 14 December 2010
    ...(instructed by the Solicitor to HMRC) for the commissioners. The following case was referred to in the judgment: Fenton v R & C CommrsTAX [2011] BTC 29 National Insurance contributions - Refunds - Contributions record - Voluntarily additional Class 3 contributions - Contributors made volunt......
  • Howell
    • United Kingdom
    • First Tier Tribunal (Tax Chamber)
    • 24 January 2012
    ...The judges of the Upper Tribunal stated: We fully agree with the decisions of both Richards J [in Fenton v R & C Commrs UNK[2010] EWHC 2000 (Ch); [2011] BTC 29 in which a similar point arose for decision] and Judge Berner about the application of regulation 52 in this group of cases. The de......

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