GS-v-HMRC (TC) [2013] NICom 72
Decision No:  C2/12-13(TC)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

TAX CREDIT

Appeal to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 1 November 2011

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	The decision of the appeal tribunal dated 1 November 2011 is in error of law.  The error of law identified will be explained in more detail below.

2.	Pursuant to the powers conferred on me by Article 15(8) of the Social Security (Northern Ireland) Order 1998, I set aside the decision appealed against.

3.	I am able to exercise the power conferred on me by Article 15(8)(a)(i) of the Social Security (Northern Ireland) Order 1998 to give the decision which I consider the appeal tribunal should have given as I can do so without making fresh or further findings of fact.

4.	My decision is that the appellant is entitled to child tax credit (CTC) amounting to £793.52 for the period from 23 December 2009 to 5 April 2010 and £2,850.65 for the period from 6 April 2010 to 5 April 2011.

5.	Accordingly, although the appeal to the Social Security Commissioner succeeds, the practical outcome, in terms of entitlement to CTC, remains the same for the appellant.  Naturally this will come as a disappointment to him, particularly as I accept that he has a genuine grievance in connection to information concerning entitlement to CTC which was provided to him by the Social Security Agency.  I say more about that grievance below.  As a Social Security Commissioner, however, I am obliged to apply the relevant legislative provisions to the facts of the case.  When I do so, then there is, unfortunately, only one possible outcome.

Background

6.	The following factual background was set out in Section 5 of the appeal submission prepared for the appeal tribunal hearing below:

A claim to tax credits was received in Her Majesty’s Revenue and Customs (HMRC) from the appellant and his wife on 26 March 2010.  The claim indicated that they had responsibility for one child.  On 19 April 2010 an award notice was sent to the appellant showing an entitlement to CTC of £83.93 for the period from 16 March 2010 to 5 April 2010.  On the same date the appellant was also sent an award notice showing an entitlement to CTC of £2,850.65 for the 2010-2011 tax year.

The appellant telephoned the tax credit helpline and requested backdating of his claim to tax credit.  On 3 May 2010 a new award notice was issued to the appellant and his wife showing an entitlement to CTC as £793.52 for the period from 23 December 2009 to 5 April 2010.

An appeal was received on 11 May 2010.  An appeals officer spoke to the appellant on 28 June 2010 and followed up the telephone conversation with a letter on the same date.  The appellant subsequently forwarded correspondence on 24 July 2010 in which he indicated that he wished to continue with his appeal.

	Proceedings before the appeal tribunal

7.	The appeal tribunal hearing took place on 1 November 2011.  The appellant was present.  Although the relevant part of the Form AT3D’TC was not completed to that effect it would appear that the appellant was represented at the oral hearing.  In the record of proceedings for the appeal tribunal hearing it is noted that the ‘representative’ made a submission.  There was no presenting officer from HMRC.

8.	The appeal tribunal disallowed the appeal and issued a decision notice to the following effect:

‘Appeal disallowed

(The claimant and his wife) were entitled to £83.93 Child Tax Credit (CTC) for the period 26.3.10 to 5.4.10 and £2850.65 CTC for the period 6.4.10 to 5.4.11’

9.	In the file of papers which is before me, which was copied from The Appeals Service (TAS), there is no copy of a request by or on behalf of the appellant for a statement of reasons for the appeal tribunal’s decision.  It would appear, however, that such a request was made and accepted by TAS.  By way of correspondence dated 13 February 2010 a copy of the statement of reasons for the appeal tribunal’s decision was forwarded to the appellant.

10.	What were the appeal tribunal’s reasons for disallowing the appeal?  The statement of reasons for the appeal tribunal’s decision is as follows:

‘The Appellant is entitled to Child Tax Credits as stated on the decision notice dated 01.11.2011.

He is clearly concerned that he may have received incorrect or misleading information from the Social Security Agency in relation to other benefits.  However the position is that, in relation to Child Tax Credits, he can receive a backdated award for a maximum period of 93 days.  That has occurred in his case.’

11.	On 12 March 2012 an application for leave to appeal to the Social Security Commissioner was received in TAS.  On 20 March 2012 the application for leave to appeal was refused by the legally qualified panel member.

	Proceedings before the Social Security Commissioner

12.	On 26 March 2012 a further application for leave to appeal was received in the Office of the Social Security Commissioners from the office of the appellant’s Member of Parliament, which was now representing the appellant.  On 20 June 2012 HMRC were asked to provide written observations on the application and such observations were received on 17 July 2012.  Written observations were shared with the appellant and his representative on 23 July 2012.  On 10 August 2012 further observations in reply were received from the appellant’s representative which were shared with HMRC on 14 August 2012.  The file was subsequently under consideration by the Legal Officer to the Social Security Commissioners.

13.	On 29 January 2013 I granted leave to appeal and directed that a further submission be prepared by HMRC on certain issues arising.  The parties were notified, on 1 March 2013 that leave to appeal had been granted, were informed that an oral hearing of the appeal would not be required and were invited to make additional submissions.  HMRC was also requested to provide a further submission on certain issues arising.  A further submission was subsequently received by HMRC on 6 March 2013 and, following a request for an extension of time to make the relevant submission, from the appellant’s representative, now the office of his Member of the Northern Ireland Assembly on 12 April 2013.  These submissions were cross-shared and, on 7 May 2013 a further submission was received from the appellant’s representative.  A further submission was received from HMRC on 29 May 2013 which was shared with the appellant and his representative on 28 June 2013.  On 9 July 2013 a further submission was received from the appellant’s representative.

Errors of law

14.	A decision of an appeal tribunal may only be set aside by a Social Security Commissioner on the basis that it is in error of law.  What is an error of law?

15.	In R(I) 2/06 and CSDLA/500/2007, Tribunals of Commissioners in Great Britain have referred to the judgment of the Court of Appeal for England and Wales in R(Iran) v Secretary of State for the Home Department ([2005] EWCA Civ 982), outlining examples of commonly encountered errors of law in terms that can apply equally to appellate legal tribunals.  As set out at paragraph 30 of R(I) 2/06 these are:

“(i)	making perverse or irrational findings on a matter or matters that were material to the outcome (‘material matters’);
(ii)	failing to give reasons or any adequate reasons for findings on material matters;
(iii)	failing to take into account and/or resolve conflicts of fact or opinion on material matters;
(iv)	giving weight to immaterial matters;
(v)	making a material misdirection of law on any material matter;
(vi)	committing or permitting a procedural or other irregularity capable of making a material difference to the outcome or the fairness of proceedings; …

	Each of these grounds for detecting any error of law contains the word ‘material’ (or ‘immaterial’).  Errors of law of which it can be said that they would have made no difference to the outcome do not matter.”

	Why was the decision of the appeal tribunal in the instant case in error of law?

16.	The decision under appeal to the appeal tribunal was a decision of an officer from HMRC dated 3 May 2010 which incorporated an award notice that the appellant and his wife showing an entitlement to CTC as £793.52 for the period from 23 December 2009 to 5 April 2010.  The duty of the appeal tribunal was to hear and determine an appeal against this decision.  As was noted above, the appeal tribunal disallowed the appeal and issued a decision notice to the following effect:

‘Appeal disallowed

(The claimant and his wife) were entitled to £83.93 Child Tax Credit (CTC) for the period 26.3.10 to 5.4.10 and £2850.65 CTC for the period 6.4.10 to 5.4.11’

17.	The emphasis in the decision notice is my own.  It is clear that if the decision of the appeal tribunal was to disallow the appeal then the obvious outcome would be to confirm the decision of 3 May 2010.  The decision dated 3 May 2010 made an award of entitlement to CTC in a greater amount and for a longer period than those recorded in the decision notice of the appeal tribunal.  In initial written observations on the application for leave to appeal, Mr Eland, for HMRC, conceded that there was an error on the face of the appeal tribunal’s decision notice but submitted that the error amounted to a ‘slip’ as:

‘… in its reasons the tribunal confirmed that the most the claimant could obtain was a “backdated award for a maximum period of 93 days”.  Notwithstanding the slip in its decision notice, I submit that that is confirmation that the claimant’s award cannot start from a date prior to 23/12/09.’

18.	In light of this statement, Mr Eland was requested to clarify whether he was (i) submitting that any error in the record of the decision notice was not material (ii) was inviting the Commissioner to rectify any error in the record of the decision notice and (iii) if so, what should the terms of the decision notice be. In response, Mr Eland made the following submission:

‘In response to the questions from the Chief Commissioner, I submit that error in the tribunal’s decision was a material error (the decision being inconsistent with the tribunal’s confirmation of the legal position).  And since leave to appeal has now been granted on this case I further submit that:

• the tribunal’s decision should be set aside; and

• the Chief Commissioner should give the decision that the tribunal ought to have made.  This was that:

The appeal is allowed in part. [the claimants] are entitled to £793.52 Child Tax Credit (CTC) for the period 23.12.09 to 5.4.10 and £2850.65 CTC for the period 6.4.10 to 5.4.11.

I therefore support this appeal on this limited basis and, insofar as my original submission was to the contrary effect, I resile from that submission.’

	Why I am in a position to give the decision which the appeal tribunal should have given

19.	Article 15(8)(a) of the Social Security (Northern Ireland) Order 1998, as amended, provides that:

‘Where the Commissioner holds that the decision appealed against was erroneous in point of law, he shall set it aside and-
(a)	He shall have power-

(i)	to give the decision which he considers the tribunal should have given, if he can do so without making fresh or further findings of fact;’

	Why I cannot back-date the appellant’s entitlement to CTC beyond 23 December 2009

20.	The law on the issue of back-dating entitlement to CTC is clear and was correctly applied by the HMRC decision-maker on 3 May 2010.

21.	As was noted by Mr Eland in his initial written observations section 3(1) of the Tax Credits Act 2002, as amended, entitlement to a tax credit is dependent on the making of a claim for it.  Under section 4 of the 2002 Act, regulations may require a claim for a tax credit to be made within a prescribed time.  The regulations which were made under the enabling power in section 4 were the Tax Credits (Claims and Notifications) Regulations 2002 (“the Claims Regulations”).

22.	Regulation 7 of the Claims Regulations (as it was in force at the relevant date) provides that:

7.  Time limit for claims (if otherwise entitled to tax credit up to [93 days])

(1)  In the circumstances prescribed by paragraph (2) a claim for a tax credit received by [a relevant authority at an appropriate office] shall be treated as having been made on the date prescribed by paragraph (3).

(2)  The circumstances prescribed by this paragraph are those where the person or persons by whom the claim is made would (if a claim had been made) have been entitled to the tax credit either - (a) on the date falling [93 days] before the relevant date (or on 6th April 2003, if later); or (b) at any later time in the period beginning on the date in sub-paragraph (a) and ending on the relevant date.

(3)  The date prescribed by this paragraph is the earliest date falling within the terms of paragraph (2)(a) or (b) when the person or the persons by whom the claim is made would (if a claim had been made) have become entitled to the tax credit.

23.	As was noted by Mr Eland ‘… there are no exceptions to the rule, whatever the circumstances of the case’.  The authors of Volume IV of Social Security Legislation 2013/14 put the matter this way:

‘… there are no exceptions or discretions to the rule …’

Why I am of the view that the appellant has a genuine grievance

24.	Throughout the entirety of the proceedings before the Social Security Commissioner, the appellant, mainly through his representatives, has submitted that he was provided with information by his local Social Security Office.  That information included receipt of correspondence dated 15 January 2010.  The appellant has provided a copy of that correspondence.  In that correspondence the appellant is informed that:

‘From 11 January 2010 we will no longer pay you for your children as you are in receipt of Child Tax Credit.  The Inland Revenue are now solely responsible for paying you for your children through Child Tax Credit and Child Benefit.’

25.	The appellant has submitted that as a result of this statement he formed the view that he did not have to make a claim to CTC.  Further, it was clear that information given to him by the Social Security Agency was ‘wrong and very misleading.’  He was not informed until a very late stage that he would have to make a claim to CTC and, as a result, he had lost out on entitlement.  The appellant’s representative submitted that in addition to the ordinary back-dating rule there was an ‘exceptional circumstances’ rule which was not applied by either the decision-maker or the appeal tribunal.

26.	I cannot argue with the appellant’s submissions that the information which was given to him through the correspondence of 15 January 2010 was misleading and led him to believe that he had an existing entitlement to CTC.  As was noted above, however, the law provides that there can only be an entitlement to a tax credit following the making of a claim to it.  Further, back-dating of entitlement to a tax credit can only be for the period prescribed in the law.  In this regard, the appellant’s representative is not correct in submitting that there is an additional ‘exceptional circumstances’ rule.

27.	Although the appellant’s appeal to the Social Security Commissioner cannot succeed, it may be that there are other avenues of redress for him, for example by seeking an extra-statutory payment from the Department for Social Development or by making a complaint of maladministration to the Northern Ireland Ombudsman.

(signed):  K Mullan

Chief Commissioner

9 December 2013