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His Majesty's Revenue & Customs v The Secretary of State for Work and Pensions and SA (TC) (Tax credits and family credit - other, Tribunal procedure and practice - tribunal jurisdiction, Universal Credit) [2022] UKUT 350 (AAC) (20 December 2022)
URL: http://www.bailii.org/uk/cases/UKUT/AAC/2022/350.html Cite as:
[2022] UKUT 350 (AAC),
[2023] WLR 2707,
[2023] 1 WLR 2707,
[2023] WLR(D) 224
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His Majesty's Revenue & Customs v The Secretary of State for Work and Pensions and SA (TC) [2022] UKUT 350 (AAC) ; [2023] AACR 4 (20 December 2022)
Tax Credit and family credits; Tribunal Procedure and Practice; Universal Credit; Right to Reside; Entitlement
The claimant and his wife are German nationals. They had been in receipt of tax credits since 2010 and child tax credit since 1 October 2011. On 21 June 2018 the claimant made a claim for universal credit, giving a London address.
On 25 June 2018 His Majesty's Revenue and Customs (HMRC) received a stop notice from the Department for Work and Pensions (DWP) stating that the basic conditions in section 4(1)(a) to (d) of the Welfare Reform Act 2012 ("the 2012 Act") were satisfied. It was accepted that the basic conditions of entitlement to universal credit were met on the basis of the claimant's and his wife's ages as given in their application, their presence in Great Britain as tested through the provision of their London address, and their statement that they were not receiving full-time education
The claimant and his wife were subsequently issued with a notice under section 18 of the Tax Credits Act 2023 that they were no longer entitled to tax credits from the date of their universal credit claim. Thereafter, the DWP made a decision on the universal credit claim, concluding that they were not entitled to universal credit as they did not have a qualifying right to reside in the United Kingdom and were therefore, by regulation 9(1) of the Universal Credit Regulations 2013, treated as not "in Great Britain", with the result that they did not meet the entitlement condition of presence in Great Britain set out in section 4(1)(c) of the 2012 Act, as read with regulation 9.
The claimant appealed to the First-tier Tribunal (F-tT) under section 38 of the 2002 Act against the decision to stop his award of tax credit. The F-tT allowed the appeal stating that as the claimant and his wife did not meet all the relevant basic conditions of entitlement to universal credit, they remained entitled to tax credits.
This appeal was brought by HMRC against the F-tT's decision. The claimant was the second respondent to the appeal and the DWP, earlier having been joined to the Upper Tribunal appeal proceedings because he is responsible for the administration of the universal credit benefits scheme and making decisions under that scheme, was the first respondent and supports the appeal.
Held, allowing the appeal, that:
1. regulation 8(2) of the Universal Credit (Transitional Provisions) Regulations 2014 (UC TP Regs) provided that where regulation 8 applied, the tax credit award was to cease by operation of law. Whether regulation 8 applied at the material time involved answering two questions of fact, which had to be determined on relevant evidence: (i) whether a claim for universal credit had been made; (ii) whether the Secretary of State was in fact satisfied that the claimant met the basic conditions specified in section 4(1)(a) to (d) of the Welfare Reform Act 2012. The language used in regulation 8(1) of the 2014 Regulations was not concerned with any wider issue of whether the claim had been properly made or the Secretary of State had been properly satisfied that the specified basic conditions had been met. Had that been the intention such language could have been used. Perhaps more importantly, there was no sound basis for reading in language such as "properly satisfied" by necessary implication when to do so would involve HMRC trespassing on the decision-making functions for universal credit (paragraphs 31, 32).
2. whatever the reach of regulation 8 of the 2014 Regulations, the appeal before the F-tT had been an appeal against HMRC's decision under section 18 of the 2002 Act and not an appeal against the Secretary of State's decision that the claimant was not entitled to universal credit. It followed that the F-tT had erred in law in considering that it had been required to determine, as a matter of substance, whether the Secretary of State had been properly satisfied at the time of issue of the stop notice that the claimant met the basic conditions specified in section 4(1)(a) to (d) of the 2012 Act. The relevant issue for the F-tT had been limited to whether the Secretary of State had in fact been satisfied that the conditions specified in section 4(1)(a) to (d) of the 2012 Act were met. That factual question had been answered affirmatively by the stop notice which was received by HMRC from the Secretary of State. Once those two questions of fact had been determined, the only remaining question for the F-tT arising under regulations 8 and 12A of the 2014 Regulations had been the correct date of termination of the tax credits award under regulation 8(2) (paragraphs 28, 29, 31, 33).