Upper Tribunal (Administrative Appeals Chamber)

IN THE UPPER TRIBUNAL                 Appeal No: CF/4822/2013

ADMINISTRATIVE APPEALS CHAMBER

Before: Upper Tribunal Judge Wright

DECISION

            The Upper Tribunal allows the appeal of the appellant.

The decision of the First-tier Tribunal sitting at Manchester on 15 July 2013 under reference SC075/13/01281 involved an error on a material point of law and is set aside.

The Upper Tribunal substitutes its own decision for that of the First-tier Tribunal.  

The substituted decision of the Upper Tribunal is to set aside that part of HMRC’s decision of 30 July 2012 that found the overpayment of child benefit of £162.40 was recoverable from the appellant and substitute for that part of the decision a decision that the said overpayment is not in law recoverable from the appellant.

This decision is made under section 12(1), 12 (2)(a) and 12(2)(b)(ii) of the Tribunals Courts and Enforcement Act 2007

REASONS FOR DECISION

1.                   This is an appeal by the claimant from a decision of the First-tier Tribunal dated 17 July 2013 (“the tribunal”).  By that decision the tribunal upheld HMRC’s decision of 30 July 2012 to the effect that the claimant had been overpaid child benefit of £162.40 for the period 5 March 2012 to 29 April 2012 and that sum was recoverable from her as she had failed to disclose that her son, who had turned 16, had left full-time education in January 2012.

2.                  The essence of the claimant’s appeal was that she had not failed to disclose as she had been told by an advisor at Jobcentre Plus that she was entitled to child benefit for her son until May 2012.  What she said precisely in her grounds of appeal was this:

“I immediately informed an under 18’s advisor at the ‘Job Centre Plus’ that my son….had ceased full-time education in January 2012.  The advisor stated (1) my son could not claim any benefits as he was under 18. (2) I could still claim tax credits and child benefit till May 2012. (3) my son should apply for more training or work, or sign with ‘Connections’ (which he did later). I questioned if I had to inform the tax credits and child benefit. The advisor stated I did not have to contact either so my claim would finish in May 2012…..My carer…is witness to my phone conversation with the under 18’s advisor, who helped me to make notes whilst having the conversation. I strongly disagree with the decision as I feel I am being penalised due to being given incorrect information and advise by an advisor. This was not my mistake…..”                           

3.                  In a letter dated 5 June 2013 informing the tribunal that she felt unable to attend the hearing of her appeal on 15 July 2013, the claimant said the following:

“The whole process of having to appeal because of someone elses incompetence is not helping my mental state of mind….It is not right that I am being punished when I am the innocent party. I have always been honest and kept up with changes that I have informed you about…It should be the JobCentre people going through this stress, because they are the guilty ones who give out wrong information to people who trust their advice.” 

4.                  The tribunal dismissed the appeal.  It dealt with the Jobcentre Plus advice as follows:

“The tribunal noted that the claimant may have been told otherwise by an advisor at the Job Centre.  However the tribunal considered that as the appellant had been written to directly by HMRC asking her to inform them when her son would be leaving full-time education when he was 16.  She would also have received the general leaflet issued.  Accordingly the appellant had notification despite what she had been told at the Job Centre and should have contacted HMRC when her son left full-time education on 10.01.12.”           

5.                  I gave permission to appeal on 25 February 2014. In so doing I said this:

“….in the light of paragraph [13] of R(A)2/06 and Judge Ward’s decision in WW –v- HMRC (CHB) [2011] UKUT 11 (AAC), is it not arguable that the tribunal erred in law in failing to consider whether the advice [the appellant] says she was given by the official at the Jobcentre acted to qualify the information previously required by the CH1715 leaflet such that she did not need to make disclosure of her son leaving full-time education prior to 16 May 2012?”

6.                  In a helpful submission of 23 July 2014 prepared by Mr Eland on behalf of HMRC, HMRC fully supports the appeal.  Mr Eland invites the Upper Tribunal to set aside the tribunal’s decision and decide that the overpayment of child benefit is not recoverable from the claimant because the disclosure the appellant made to the Jobcentre Plus advisor in January 2012 was sufficient disclosure to HMRC at the time and there was no reason to expect any further disclosure before the appellant’s contact with HMRC on 16 May 2012.

7.                  It is pointed out by Mr Eland that the appellant’s later (i.e. after the tribunal’s decision) evidence of her being told by the Jobcentre Plus advisor that she did not need to disclose to HMRC her son leaving full-time education for six month because he had started on a Connexions course chimes substantially with the provisions of regulation 5 of the Child Benefit (General) Regulations 2006. This regulation provides for a 20 week extension period of entitlement to child benefit after a 16 or 17 year old has left full-time education if: (i) he is registered on [a Connexions course] (regulation 5(2)(b) and 5(4)(a)), and (ii) the child benefit claimant has made a request to HMRC within 3 months of the child ceasing full-time education for the extension payment (regulation 5(2)(f)). Mr Eland argues that this further evidence supports the appellant’s argument that she had discussed her son’s case with an “under 18’s advisor” at the Jobcentre at the point her son left full-time education in January 2012 and the advice she says she was given about child benefit continuing through to May 2012 (20 weeks from 10 January 2012 running to 30 May 2012). 

8.                 I am not sure if this further point necessarily needs to be made as the tribunal seems to me to have proceeded on the basis that the advice as alleged was given to the appellant by the Jobcentre Plus advisor: the tribunal then not considering, or failing to consider properly if, it had causative potency.  However, I accept that it is relevant to my remaking the decision if I set the tribunal’s decision aside.            

9.                  I am satisfied that the tribunal erred in law for the reasons I gave on 25 February 2014. Even absent the “Connexion” evidence, in my judgment the appellant’s evidence as to what she was told by the Jobcentre Plus advisor – evidence which as I say the tribunal did not reject and indeed  seems to have accepted – gave rise to real and significant issues (a) as to whether the prior obligation to disclose imposed by form CH(A)297B and the CH1715 Payment advice notes was varied by the advice given by the Jobcentre Plus advisor, and/or (b) whether disclosure had been made to that advisor.  The failure of the tribunal to address those issues amounted to a material error of law which means its decision must be set aside.

10.              The issue that then remains is whether I should remit the appeal to the First-tier Tribunal for it to be re-decided or for me to decide it myself. I take the latter course on the basis that the evidence is not really in dispute, realistically no better evidence is likely to arise on remission, and because HMRC, whose interests are directly engaged, asks me to take this course and find the overpayment is not recoverable.

11.               On the evidence before me I find: (i) that the appellant was sent the CH1715 Payment advice notes, (ii) that she disclosed to the Jobcentre Plus under 18’s advisor on 10 January 2012 that her son had ceased to be in full-time education on that date; and (iii) the advisor told her that she did not need to provide this information to HMRC as she would continue to get child benefit for her son until the end of May 2012. 

12.              These findings in my judgment lead to the following consequences. My reasoning differs somewhat from that put forward by Mr Eland, but the result is the same. 

13.              First, the obligation to disclose imposed on the appellant arose because she was served with the form CH1715 and therefore arose under regulation 23(2) of the Child Benefit and Guardian’s Allowance (Administration) Regulations 2003 (“the 2003 Regs”). As Judge Ward points out in WW, this obligation requires disclosure to be made to “us” and that is limited to (page 25) the Child Benefit Office in Newcastle, HMRC’s website or HMRC telephone numbers.  The “us” does not include Jobcentre Plus or its advisors. Ordinarily therefore, and following B -v- SSWP [2005] EWCA Civ 929; R(IS)9/06, there will be a breach of this obligation, and thus a failure to disclose, if the information as to a young person leaving full-time education is not provided by the claimant directly to HMRC or its child benefit office.  Telling the Jobcentre Plus advisor will not suffice.

14.              The position would have been different had I not been satisfied that the CH1715 form had been served on the appellant. In that circumstance regulation 23(2) of the 2003 Regs would not have been the source of the obligation to disclose, regulation 23(4) of the 2003 Regs would in all likelihood have to have been the source of the obligation, but disclosure under regulation 23(4) can be met by notifying a “relevant authority” and this includes “a person providing services to the Secretary of State [for Work and Pensions]”, (i.e. a Jobcentre Plus advisor).

15.               Thus the appellant telling the Jobcentre Plus advisor that her son had ceased full-time education of itself was not disclosure to HMRC for the purposes of the CH1715/regulation 23(2) obligation imposed on the appellant. However, as WW also emphasises, the scope and content of a claimant’s duty under the regulation 23(2)/CH1715 obligation can be varied by oral representations by those who have authority, or at least ostensible authority, to do so.

16.              Second, on the facts of this case, and in a context where HMRC has not sought to argue against the Jobcentre Plus under 18’s advisor having the ostensible authority to advise the appellant about (i) continuing child benefit entitlement and (ii) when disclosure to HMRC need and need not to be made, I am prepared to accept that the effect of the advice given to the appellant by the Jobcentre Plus advisor was to vary or qualify the direction given on the form CH1715 – “You must tell us straightaway if [a young person aged 18-19 leaves full-time non-advanced education]”  -  to one that she did not need to notify HMRC of her son having left full-time education until the end of May 2012.  Consequently, as the appellant did notify HMRC of this information before the end of May 2012 she did not breach the modified obligation she was acting under, and therefore there was in law no failure to disclose. 

17.               I emphasise, however, that this case turns on its particular facts and HMRC in effect not arguing against the ostensible authority of the Jobcentre Plus advisor on those facts.                                                               

18.              I therefore set aside the tribunal’s decision of 2 October 2013 and remake it in the terms set out above.                                                      

Signed (on the original) Stewart Wright

Judge of the Upper Tribunal

Dated 12^th November 2014