R DK v The Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bourne |
| Judgment Date | 05 July 2021 |
| Neutral Citation | [2021] EWHC 1845 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/2410/2020 |
and
[2021] EWHC 1845 (Admin)
THE HON. Mr Justice Bourne
Case No: CO/2410/2020
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Simon Cox and Michael Spencer (instructed by Child Poverty Action Group) for the Claimant
Galina Ward (instructed by Government Legal Department) for the Defendant and the Interested Party
Hearing date: Wednesday 16 th June 2021
Approved Judgment
Introduction
The Claimant challenges the Defendant's decision to reject his backdated claim for child tax credit made following the success of his asylum claim. The issue is whether, as the Defendant contends, the claim is lawfully barred by Article 7 of the Welfare Reform Act 2012 (Commencement No. 23 and Transitional and Transitory Provisions) Order 2015 (SI 2015/634) (“Order 23”).
The Claimant's case is that (1) Article 7, properly construed, does not bar a claim of this kind in respect of a period of entitlement occurring before an applicant could apply for Universal Credit, or (2) applying Article 7 so as to bar the claim would be incompatible with the Claimant's rights under Article 14 of the European Convention on Human Rights read in conjunction with Article 8 and/or Article 1 of Protocol 1, or (3) in making Article 7, the Interested Party failed to comply with her duty under section 149 of the Equality Act 2010 (“the PSED”).
The first of those three points was in issue in a Scottish judicial review claim, Adnan and Adnan v HMRC [2021] CSOH 63, in which judgment was given by the Outer House of the Court of Session on 15 June 2021, the day before the hearing of this claim. I shall return to that decision below. The Claimant made an application to me on the day of the hearing, inviting me to stay these proceedings pending determination of any appeal in Adnan. I declined that invitation, ruling that it was in the interests of justice to proceed with the substantive hearing for which all parties had fully prepared, not least because the Claimant in this case relies on two grounds in the alternative to the first construction ground, which were not the subject of the decision in Adnan.
Statutory background
The Tax Credits Act 2002 made provision for child tax credit (“CTC”) and working tax credit, repealing earlier provisions relating to tax credits. Tax credits could be claimed by people who are aged at least 16, and CTC could be claimed by such people who were responsible for a child or “qualifying young person”.
Section 3(1) provided:
“Entitlement to a tax credit for the whole or part of a tax year is dependent on the making of a claim for it.”
Entitlement to tax credits therefore depended on the making of a claim for them, and it was necessary to make a new application for tax credits for each tax year.
Section 4(1) empowered the making of regulations requiring applications to be made in a particular way and at a particular time and providing for a claim made in specified circumstances to be deemed to have been made on a specified date, earlier or later than the actual date of the claim.
Section 42 permitted the entitlement to tax credits of persons subject to immigration control, including asylum seekers, to be excluded or modified.
Pursuant to section 42, the Tax Credit ( Immigration) Regulations 2003 (“the 2003 Regulations”) were made. Regulation 3 of the 2003 Regulations excluded such entitlement in paragraph (1), but provided exceptions including the following in relation to asylum seekers:
“(4) Where a person has submitted a claim for asylum as a refugee and in consequence is a person subject to immigration control, in the first instance he is not entitled to tax credits, subject to paragraphs (5) to (9).
(5) If that person—
(a) is notified that he has been recorded by the Secretary of State as a refugee or has been granted section 67 leave, and
(b) claims tax credit within one month of receiving that notification,
paragraphs (6) to (9) and regulation 4 shall apply to him.
(6) He shall be treated as having claimed tax credits—
(a) on the date when he submitted his claim for asylum, and
(b) on every 6th April (if any) intervening between the date in sub-paragraph (a) and the date of the claim referred to in paragraph (5)(b),
rather than on the date on which he makes the claim referred to in paragraph (5)(b).
(7) Regulations 7, 7A and 8 of the Tax Credits (Claims and Notifications) Regulations 2002 shall not apply to claims treated as made by virtue of paragraph (6).
(8) He shall have his claims for tax credits determined as if he had been recorded as a refugee on the date when he submitted his claim for asylum.” 1
In short, a former asylum seeker could claim tax credits within one month of being granted refugee status, in which case he would be treated as if he (1) had made the claim on the date when he claimed asylum, (2) had been a refugee from that date and (3) had made such an application for each tax year since his asylum application.
By virtue of reg 3(5)(b), this entitlement to be awarded any applicable tax credit for that period depended upon the making of a claim for the tax credit within the time limit.
This challenge arises from the transition from tax credits to the new system of Universal Credit (“UC”).
UC was introduced by the Welfare Reform Act 2012 (“the 2012 Act”). It replaced other benefits, including tax credits, which have been referred to as “legacy benefits” and which were prospectively abolished by section 33 of the 2012 Act.
However, UC (together with the abolition of legacy benefits) was subject to a phased introduction. Under section 150 of the 2012 Act, most of the relevant provisions were to be brought into force by statutory instruments. Such statutory instruments, from 2015 onwards, specified dates upon which UC would be introduced in different postcodes. From those dates, most applicants living in those postcodes could claim UC, and making such a claim would cause the relevant legislation, including the repeal of provisions for legacy benefits, to come into force in relation to each individual claimant 2. Such areas, once this had happened, have been referred to as “full service areas”.
Order 23 was one of the statutory instruments which contained commencement and transitional provisions. The key provision for the present case is Article 7 of Order 23. Article 7(1) provides:
“Except as provided by paragraphs (2) to (6), a person may not make a claim for housing benefit, income support or a tax credit (in the latter case, whether or not as part of a Tax Credits Act couple) on any date where, if that person made a claim for universal credit on that date (in the capacity, whether as a single person or as part of a couple, in which he or she is permitted to claim universal credit under the Universal Credit Regulations 2013), the provisions of the Act listed in Schedule 2 to the No. 9 Order would come into force under article 3(1) and (2)(a) to (c) of this Order in relation to that claim for universal credit.”
The effect of Article 7(1) is that in an area which becomes a full service area, only claims to UC can be made. In such an area, where a UC claim by a person would bring the provisions of the 2012 Act into force in relation to them, that person cannot make a new claim for a legacy benefit such as CTC.
However, the provisions for legacy benefits including tax credits have remained in force and have continued to apply to individuals who have not made, or have not needed to make, an application for UC.
UC, like the legacy benefits which it replaced, generally cannot be claimed by those subject to immigration control 3.
A significant feature of the UC system, which differentiates it from the legacy benefit systems, is that claims for UC cannot be backdated. So those who are recognised as
The facts
The Claimant arrived in the UK from Sri Lanka on 21 December 2009 with his wife and son (then aged 11). He made a number of unsuccessful claims for asylum, the first of which was on 22 December 2009. However, his last claim, made on 5 April 2016, was successful, resulting in a grant of refugee status with effect from 19 December 2019. The decision letter dated 31 December 2019 was received on 3 January 2020.
As a person subject to immigration control, the Claimant could not claim legacy benefits including CTC at any time before he received his refugee decision. If he had previously been a recognised refugee (or a British citizen), he could have claimed CTC in respect of his son.
The Claimant's son left full-time education aged 18 on 2 July 2016. Any entitlement to CTC would end on that date.
The Claimant's area became a full service area on 25 October 2017.
On 21 January 2020, after his refugee status was recognised, the Claimant claimed UC. As I have said, that claim could not contain any backdated element. His son having left full-time education, the Claimant could not claim the child element of UC in respect of him.
On 28 January 2020 (and again on 4 March and 8 April 2020) the Claimant also submitted written claims for CTC pursuant to the 2003 Regulations for the period between 22 December 2009 (his original asylum application) and 2 July 2016 (his son leaving full-time education).
The Defendant replied on 17 February 2020 and 8 April 2020, stating that CTC could not be awarded because the Claimant did not fall within any exception to Article 7(1) of Order 23 which would permit a new tax credit claim.
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