Jiminez v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 2004 |
| Date | 01 January 2004 |
| Court | Special Commissioners (UK) |
special commissioners decision
John Walters QC
David Ewart, of Counsel, instructed by the Mary Ward Legal Centre, for the Appellant
Khawar Qureshi, of Counsel, instructed by the Solicitor of Inland Revenue, for the Respondent
INCOME TAX - Appeal against a refusal of an "error or mistake" claim: s.33 TMA 1970 - claim for exemption from UK income tax on emoluments received by reason of employment as member of the service staff of a diplomatic mission: article 37(3) of the Vienna Convention on Diplomatic Relations, 1961, having the force of law in the United Kingdom by virtue of section 2 of the Diplomatic Privileges Act 1964 - held that the Appellant, although a member of the service staff of a diplomatic mission was permanently resident in the United Kingdom within the meaning of article 37(3) and therefore disqualified from exemption - held further that even if she was not so permanently resident she was in any case prevented from enjoying such exemption because there was no appropriate notification of her appointment as required by article 39(1) of the Convention - appeal dismissed: Article 10 of the Convention, article 31 of the Vienna Convention on the Law of Treaties, 1980, section 4 of the Diplomatic Privileges Act 1964, IRC v Commerzbank AG [1990] STC 285, R v Secretary of State for the Home Department, ex parte Adan [2002] 1 WLR 143, R v Secretary of State for the Home Department, ex parte Bagga [1991] 1 All ER 777 also considered.
1. The Appellant, Mrs. Jimenez, appeals against refusals of claims made under section 33 Taxes Management Act 1970 ("TMA") (error or mistake) for the years 1992/93 to 2000/01 inclusive. The claims were made by a single letter dated 23rd April 2001. In short, Mrs. Jimenez claimed repayment of tax she had paid for these years because, she submitted, she was in all the years of assessment concerned exempt from United Kingdom income tax by virtue of article 37(3) - the claim referred to article 37(4) but no point is taken on that - of the Vienna Convention on Diplomatic Relations signed in 1961 ("the 1961 Convention"), which has the force of law in the United Kingdom pursuant to section 2 of and Schedule 1 to the Diplomatic Privileges Act 1964 ("DPA").
2. Article 37(3) of the 1961 Convention is as follows:
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3. Members of the service staff of the mission who are not nationals of or permanently resident in the receiving State shall enjoy immunity in respect of acts performed in the course of their duties, exemption from dues and taxes on the emoluments they receive by reason of their employment and the exemption contained in Article 33.
3. Mrs. Jimenez was (and remains) employed as a cook by the Namibian High Commission in London (by a letter of appointment dated 3rd February 1992, confirmed after a probationary period by a letter dated 1st May 1992). She is a national of the Republic of the Philippines, and she argues that she has never been "permanently resident" in the United Kingdom.
4. Her claim was (ultimately) formally refused by the Board of Inland Revenue by a letter dated 3rd December 2001. Although the Inland Revenue refused Mrs. Jimenez's claim for exemption generally on the merits, the claims in relation to 1992/93 and 1993/94 were refused because they were made outside the six-year time limit provided by section 33(1) TMA. Mr. Ewart, for Mrs. Jimenez, accepted that I must dismiss the appeal in relation to these two years of assessment, for this reason. I do so accordingly.
5. In their letter refusing the claim, the Inland Revenue also took the point that no claim under section 33 TMA was competent for the years 1999/2000 or 2000/01 because, in the case of 1999/2000, the self-assessment return was still the subject of an enquiry and "until any enquiry is concluded I do not consider that any self-assessment can be considered to be excessive as your self-assessment for this year is not yet finalised", and in relation to 2000/01 no return had been received with the result that there was no self-assessment which could be excessive by reason of an error in the return. These points were not disputed in the appeal by Mr. Ewart and I therefore dismiss the appeal formally in relation to these two years of assessment as well.
6. The parties' submissions before me addressed the issue of whether Mrs. Jimenez qualified for exemption from United Kingdom taxes on emoluments received by her by reason of her employment by the Namibian High Commission in London. Formally, the result on the appeal in relation to the years of assessment 1994/95 to 1998/99 inclusive depends on my decision on this issue. According to the Schedule attached to Mrs. Jimenez's claim, the tax payments made for these years totalled £5,494.44, out of a total claim for £8,103.49.
7. The parties' respective arguments on the main issue did not engage with each other: they were ships passing in the night. To extend the metaphor, although they each traversed the same water (the construction of article 37(3) of the 1961 Convention) they started at different ports (the Appellant at article 37(3) itself; the Revenue at what it asserted were the rules of customary international law) and navigated by different stars (the Appellant by the plain meaning of English words and an analogy with the English law of domicile; the Revenue by accepted state practice, specifically United Kingdom practice, on the 1961 Convention). It is not surprising, then, that they arrived at different destinations.
8. An Agreed Statement of Facts was before me. In addition, Mrs. Jimenez provided a Witness Statement and gave evidence in person. She was cross-examined by Mr. Qureshi for the Inland Revenue.
9. I find the following facts from the Agreed Statement:
10. Mrs. Jimenez came to the United Kingdom on 23rd April 1991 on a visit from the Philippines.
11. She commenced employment for the Namibian High Commission in London in January 1992 as a cook. Before that she had worked for the Zambian High Commission in London.
12. Mrs. Jimenez was at all times designated as "locally engaged staff" by the Namibian High Commission. She signed the High Commission's "conditions of employment for locally recruited staff" on 29th January 1993. She worked as a cook from January 1992 to September 1999 and as a receptionist from then until 2002. In that year she began to work again as a cook.
13. Mrs. Jimenez paid United Kingdom tax (Schedule E). The Namibian High Commission did not at the material time(s) operate PAYE. For the years when self-assessment applied, a computation of liability was generated based upon the self-assessment return made.
14. Mrs. Jimenez sought leave for her husband and four daughters to join her in the United Kingdom, but obtained leave only for her husband and youngest daughter (then 15) to enter the United Kingdom, in 1994.
15. Mrs. Jimenez's youngest daughter was granted leave to remain in the United Kingdom whilst, inter alia, she remained a member of the family forming part of Mrs. Jimenez's household.
16. I find the following facts from Mrs. Jimenez's evidence (given both by her Witness Statement and orally) which supplement the above agreed facts.
17. Mrs. Jimenez visited the United Kingdom from the Philippines in April 1991 accompanying her niece (aged 15) and great-nephew (aged 8) on a two-month visit to Mrs. Jimenez's brother-in-law and his wife, who lived here.
18. The children returned to the Philippines on 15th June 1991. Mrs. Jimenez decided to stay on for a short time to have a holiday by herself.
19. On 12th June 1991 there was an eruption of Mount Pinatubo in the Philippines, which lies to the north-west of Manila. The farm on which Mrs. Jimenez's husband worked was destroyed by the aftermath of the eruption. It also very severely impeded the surface communications with Manila, which Mrs. Jimenez's own business depended on.
20. On or about 20th June 1991, Mrs. Jimenez agreed with her husband that the best thing for the family would be if she found work and stayed on legally in the United Kingdom. They were particularly concerned about their ability to continue financing their daughters' education.
21. Mrs. Jimenez sought the advice of the Philippines embassy in the United Kingdom. She was informed that in order to remain in the United Kingdom legally she would be well advised to get a job with a diplomatic mission. Through a contact in the Philippines embassy, she almost immediately obtained a job as a cook with the Zambian High Commission. That job started in late June 1991. However it ended at about the end of that year, but in January 1992 she found work as a cook at the Namibian High Commission.
22. In September 1992, Mrs. Jimenez returned to the Philippines on a visit to her mother who was ill. When she returned to the United Kingdom in October 1992 she found that she was exempt from immigration control as a member of a diplomatic mission. Her passport was endorsed by the United Kingdom Home Office on 9th October 1993 to show that "while the holder is employed as a cook at [the] Namibian High Commission, she is not subject to any condition or limitation on the period of permitted stay in the United Kingdom".
23. Mrs. Jimenez's husband, who had joined her (with their youngest daughter) in the United Kingdom in June 1994, started to get ill with depression in March 1995. He returned to the Philippines in March 1999, only to return to the United Kingdom in June 1999. He tried to set up a business in the United Kingdom, but it was unsuccessful. He returned to the Philippines permanently in April 2000.
24. Mrs. Jimenez says that she intends to return to the Philippines herself. According to her Witness Statement (dated 23rd January 2004), this will be when the present proceedings are resolved. According to her letter of 23rd April 2001, claiming repayment of...
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