AC v Her Majesty's Revenue and Customs (TC)
| Jurisdiction | UK Non-devolved |
| Judge | Judge Poynter |
| Neutral Citation | [2018] UKUT 233 (AAC),[2018] UKUT 233 (AAC) |
| Court | Upper Tribunal (Administrative Appeals Chamber) |
| Subject Matter | Tribunal procedure,practice,Poynter,R |
| Date | 12 July 2018 |
| Published date | 24 August 2018 |
AC v HMRC (CTC) [2018] UKUT 233 (AAC)
CTC/2925/2016 1 12 July 2018
IN THE UPPER TRIBUNAL
Appeal No. CTC/2925/2016
ADMINISTRATIVE APPEALS CHAMBER
Before Upper Tribunal Judge Poynter
DECISION
The appeal is allowed.
The making of the decision of the First-tier Tribunal given at Bristol on 25 April 2016
under reference SC188/16/00318 involved the making of an error on a point of law.
That decision is set aside.
I remake the decision in the following terms:
The proceedings before the First-tier Tribunal are struck out under rule
8(2)(a) of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement
Chamber) Rules 2008.
REASONS FOR DECISION
Introduction
Representation
1 In these proceedings, the claimant appeals against the above decision of the
First-tier Tribunal. He is represented by Ty Arian Limited, solicitors trading as T. A.
Law.
2 The Commissioners for Her Majesty’s Revenue and Customs (“HMRC”) are
the respondent to the appeal. They are represented by Mr Eland of HMRC Solicitor’s
Office and Legal Services.
Oral hearing
3 Neither T. A. Law, nor Mr Eland, have asked me to hold an oral hearing of
the appeal and I do not consider that a hearing would assist me to decide the
issues—which are exclusively legal—fairly and justly. I have therefore reached my
decision on the basis of the parties’ detailed written submissions.
AC v HMRC (CTC) [2018] UKUT 233 (AAC)
CTC/2925/2016 2 12 July 2018
Overview of the tax credit decision-making process
4 It will help to explain my decision if I begin by summarising how decisions
about tax credits are made. I appreciate that I am not the first Upper Tribunal Judge
to offer such an explanation: in particular, Upper Tribunal Judge Wright has recently
given a more detailed account in HO v HM Revenue & Customs (TC) [2018] UKUT
105 (AAC). Nor, I suspect, will I be the last. However, the circumstances of this
appeal show that the explanation will bear repetition.
5 The primary legislation governing the tax credit decision-making process is
set out in sections 14-18 of the Tax Credits Act 2002 ("the Act"). So far as is relevant
to this appeal, I have reproduced the text of those provisions in an Appendix to this
decision.
6 The amount of a claimant’s entitlement to tax credits is assessed by
reference to his circumstances during the whole of a particular tax year, i.e., the
period from 6 April in one year to 5 April in the next, both dates included. (In what
follows, when I say “year” I will always be referring to tax years.)
7 One consequence of that basis of assessment is that—in marked contrast to
the position for many social security benefits—all decisions about entitlement to tax
credits are retrospective. Such decisions can only ever be made after the end of year
to which they relate: the claimant’s financial circumstances for the year as a whole
cannot be known definitively until that year is over.
8 However, some decisions about tax credits must be taken during or before
the year to which they relate. If they were not, tax credits could only be paid after the
end of the relevant year. I will refer to such decisions as “in-year decisions”. They are
made under sections 14-16 of the Act, although section 15 is not relevant to this
appeal.
9 In-year decisions are not about entitlement. Rather, they are about how much
tax credit a claimant (or joint claimants) should be awarded for, and therefore paid
during, that year.
10 Decisions about awards are made on the basis of an estimate of what the
claimant’s circumstances for the year as a whole will probably be. To that extent, in -
year decisions are always preliminary. The amount awarded and paid during the year
may or may not be the same as the amount to which the claimant is finally found to
be entitled.
11 Another way of looking at it—although neither the legislation nor HMRC
describe it in these precise terms—is to think of tax credits that are awarded and paid
to a claimant during a particular year as if they were payments on account of any tax
credits to which those claimants might be found to be entitled following the year end.
Section 14
12 The initial decision for each year is an in-year decision taken under section
14 of the Act. That section requires HMRC to decide whether to make an award of
the tax credit that has been claimed and, if so, to decide the rate at which to award it.
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C v Her Majesty's Revenue & Customs (TC)
...credit for a tax year”. 26. After I granted permission to appeal in this case, Upper Tribunal Judge Poynter decided, AC v HMRC (CTC) [2018] UKUT 233 (AAC). The Judge “20. It follows that there can be no entitlement to tax credits where no in-year award has been made under section 14. Withou......