The Queen (on the Application of DK) v The Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Lord Justice Singh,Lady Justice Andrews,Lord Justice Bean |
| Judgment Date | 08 February 2022 |
| Neutral Citation | [2022] EWCA Civ 120 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C1/2021/1289 |
and
[2022] EWCA Civ 120
Lord Justice Bean
Lord Justice Singh
and
Lady Justice Andrews
Case No: C1/2021/1289
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Mr Justice Bourne
Royal Courts of Justice
Strand, London, WC2A 2LL
Galina Ward (instructed by the Solicitor's Office and Legal Services, HMRC) for the Appellants and the Interested Party
Simon Cox and Michael Spencer (instructed by the Child Poverty Action Group) for the Respondent
Hearing date: 25 January 2022
Approved Judgment
Remote hand-down: This judgment was handed down remotely at 10 a.m. on Tuesday, 8 February 2022 by circulation to the parties or their representatives by email and by release to BAILII and the National Archives.
Introduction
This appeal arises from Bourne J's order (sealed on 5 July 2021), granting the claim for judicial review of a decision by the Commissioners for Her Majesty's Revenue and Customs (“HMRC”) to refuse the Respondent's claim for backdated child tax credit: R (DK) v HMRC [2021] EWHC 1845 (Admin); [2021] 4 WLR 122. The Judge granted permission to appeal to this Court.
The issue is whether a claim for the backdated tax credit, under the system of the Tax Credits Act 2002 (“the 2002 Act”), is valid for the period of time before a person is recognised as a refugee, as provided for by regulations made under the 2002 Act; or whether article 7 of the Welfare Reform Act 2012 (Commencement No. 23 and Transitional and Transitory Provisions) Order 2015 (“the 2015 Order”) prevents such a claim being made.
The Appellants are HMRC and the Interested Party is the Secretary of State for Work and Pensions. The Appellants' case is that, under article 7 of the 2015 Order, a claim for tax credits is made on the date on which any action is taken which results in a decision on the claim being required. In this case that date was 28 January 2020, after asylum was granted to the Respondent; but by that date no further child tax credit claims were possible owing to the introduction of Universal Credit in the area where the Respondent was resident.
The Respondent maintains that the Judge was correct to hold that he should be treated as having claimed tax credits on the date when he claimed asylum, and on 6 April (the first day of the tax year) in subsequent years. If the earlier date is the relevant date, then the Respondent will be entitled to tax credits for the period from the date of his asylum claim until 2 July 2016, when his son left full-time education.
In essence the Respondent's case is that regulations 3(5)-(8) of the Tax Credits (Immigration) Regulations 2003 (SI 2003 No. 653) (“the 2003 Regulations”), made pursuant to section 42 of the 2002 Act, provide for a refugee, once recorded as such, to claim tax credits for the period from the date when their claim for asylum was made. The Appellants rely on the Tax Credits (Claims and Notifications) Regulations 2002 (SI 2002 No. 2014) (“the 2002 Regulations”), made pursuant to section 4(1) of the 2002 Act, which make provisions for the making of claims as referred to in article 7 of the 2015 Order.
In granting the Respondent's claim for judicial review on this ground, Bourne J followed the decision of the Outer House of the Court of Session in Adnan v HMRC 2021 CSOH 63; 2021 SLT 883 (Lord Tyre) in the interests of comity, although he expressed his doubts about that decision. The appeal in Adnan was dismissed by the Inner House shortly before the hearing of the appeal before this Court: 2022 CSIH 2 (Lord Woolman, giving the Opinion of the Court, which included the Lord President, Lord Carloway, and Lord Pentland).
Factual Background
On 21 December 2009 the Respondent arrived in the United Kingdom from Sri Lanka with his wife and son (then aged 11) and on the next day submitted a claim for asylum. The Respondent had three asylum claims refused and in August 2012 his receipt of asylum support payments ended.
On 5 April 2016 the Respondent made his final claim for asylum. On 2 July 2016 the Respondent's son left full-time education aged 18: on that date any entitlement to child tax credit ended. However, as the Respondent was for all of this time a person “subject to immigration control”, he could not claim any “legacy” benefits before receiving a positive decision on his claim for asylum.
On 25 October 2017 the Respondent's area became a “full service area” for the purposes of Universal Credit.
On 1 February 2019 section 33(1)(f) of the Welfare Reform Act 2012, abolishing tax credits, came into force, subject to certain saving provisions made under article 3(1) of the Welfare Reform Act 2012 (Commencement No. 32 and Savings and Transitional Provisions) Order ( SI 2019 No. 167), which are not material for present purposes.
On 19 December 2019 the Secretary of State for the Home Department granted the Respondent's claim for asylum and on 3 January 2020 the Respondent's solicitor received a letter confirming this.
On 21 January 2020 the Respondent made a claim for Universal Credit. The Respondent was not able to claim for the child element of Universal Credit at this time, as his son had already left full-time education and Universal Credit did not permit any backdated element.
On 28 January 2020 the Respondent posted a completed tax credit claim form to HMRC along with a written request for a backdated award.
On 17 February 2020 the Appellants sent a letter to the Respondent's advisor, Refugee Action, stating that they were no longer accepting any new claims for tax credits. On 25 February 2020 the Respondent sought a mandatory reconsideration of this decision from the Appellants.
In May 2020 the Respondent received a letter from the Appellants dated 8 April 2020 stating that he was not allowed to make a new claim for tax credits. On 19 May 2020 the Respondent replied to the Appellants seeking a mandatory reconsideration of that decision in his case. On 7 July 2020 the Appellants issued a reconsideration notice and refused to change their decision.
Material legislation
Tax credits
Section 3(1) of the Tax Credits Act 2002 states:
“Entitlement to a tax credit for the whole or part of a tax year is dependent on the making of a claim for it.”
Section 4(1) of the 2002 Act provides:
“Regulations may –
(a) require a claim for a tax credit to be made in a prescribed manner and within a prescribed time,
(b) provide for a claim for a tax credit made in prescribed circumstances to be treated as having been made on a prescribed date earlier or later than that on which it is made, …”
Section 42(1) of the 2002 Act provides that regulations may make provision in relation to persons “subject to immigration control” (a) for excluding entitlement to, or to a prescribed element of, child tax credit, or (b) for this part of the Act to apply subject to other prescribed modifications.
Section 42(2) of the 2002 Act provides that the phrase “a person subject to immigration control” has the same meaning as in section 115 of the Immigration and Asylum Act 1999 (“the 1999 Act”). According to section 115(9) of the 1999 Act “a person subject to immigration control” means a person who (a) requires leave to enter or remain in the United Kingdom but does not have it; (b) has leave to enter or remain in the UK which is subject to a condition that he does not have recourse to public funds; and there are two other situations described in subparagraphs (c) and (d). It is common ground that the Respondent fell within this definition at all material times.
The 2002 Regulations
Regulation 5 of the 2002 Regulations provides:
“(1) This regulation prescribes the manner in which a claim for a tax credit it to be made.
(2) A claim must be made to a relevant authority at an appropriate office –
(a) in writing on a form approved or authorised by the Board for the purpose of the claim.
or(b) in such other manner as the Board may decide having regard to all the circumstances.”
The 2003 Regulations
Regulation 3 of the 2003 Regulations provides:
“(1) No person is entitled to child tax credit … while he is a person subject to immigration control, except in the following Cases, and subject to paragraphs (2) to (9).”
Of particular relevance are paragraphs (4) to (8):
“(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 6 th 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).
…
(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.”
Universal Credit
The concept of Universal Credit was created by section 1 of the Welfare Reform Act 2012 (“the 2012 Act”) but its introduction has occurred in stages and in different geographical areas at different times.
Section 33(1) abolished certain benefits, including child tax...
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