CCS/1639/2007

DECISION OF THE CHILD SUPPORT COMMISSIONER
  
1.	This is an appeal by the non-resident parent (Mr. M), brought with the leave of a legally qualified panel member, against a decision made by an appeal tribunal sitting at Ashford on 19 February 2007. For the reasons set out below that decision was in my judgment erroneous in law and I set it aside. In exercise of the power in s.24(3)(a) of the Child Support Act 1991 I substitute the following decision for that made by the Tribunal:

The appeal by the parent with care against the decision of the Secretary of State made on 28 January 2006 is allowed to the extent that the only allowable travel related expenses to be added, by way of departure direction, to the exempt and protected income of the non-resident parent with effect from 11 November 2005 (the effective date of the non-resident parent’s application for supersession of the existing departure direction) are (a) the sum of £20 per week in respect of petrol used in travelling from Broadstairs to Canterbury and (b) the sum of £24 per week in respect of parking charges in Canterbury. 

However, this decision is not to be implemented (by way of recalculation of the child support maintenance payable by Mr. M) until the Secretary of State has considered, in the light of what is said in paragraphs 17 and 18 below, whether the calculation of Mr M’s net income under the main formula assessment requires to be revised or superseded. Any of the parties may apply to me in the event of any dispute arising out of the implementation of this decision. 

2.	Mr M and the parent with care (Mrs F) have two children, now aged 14 and 12. 

3.	Mr M is employed as an investment partner in the wealth management division of a leading bank. There is included in his pay slips a sum of £287.50 per month “SPEC TA”, which apparently stands for “special territorial allowance.” That equates to £3450 per annum, which was the sum shown in his original letter of employment dated 19 March 2001 (p.141) as “London allowance.” 

4.	On 11 November 2005 Mr. M applied for a supersession of a departure direction decision on the ground of an increase in the amounts which had been allowed, under that departure direction, in respect of his travel to work costs and contact costs. Such a departure direction has the effect of increasing the amounts included in exempt income and protected income (see regs. 37 and 38 of the Child Support (Departure Direction etc.) Regulations 1996). (No issue arises in respect of the contact costs, and I therefore do not consider them further).

5.	The supersession application (as elaborated by details supplied subsequently) was made on the basis that Mr. M incurred (a) £20 per week petrol travelling between his home in Broadstairs and his main place of work in Canterbury (b) £24 per week parking costs in Canterbury (c) £41.07 per week in respect of travelling to clients by car and (d) £16.84 per week travelling by train to meetings in London. That came to a total of £101.91 per week. 

6.	It appears that the sum of £287.50 per month payable by way of “SPEC TA”was included in Mr. M’s gross earnings for the purpose of calculating his liability for child support maintenance under the main formula, and that none of the expenses referred to in para. 5 above were deducted in calculating those earnings. 

7.	It further appears that, prior to the application for supersession referred to in para. 4 above, all four categories of the expenses referred to in para. 5 above had been added (less the mandatory deduction of £15 per week), by way of a departure direction under reg. 13 of the 1996 Regulations in respect of travel to work costs, to his exempt and protected income under the main formula assessment. 

8.	As a result of the supersession application referred to in para. 4 above a recalculation of the travel related costs was made, again on the footing that all four categories of costs referred to in para. 5 above were to be added, by way of departure direction, to Mr. M’s exempt income and protected income. Thus, by a decision made on 28 January 2006 it was directed, by way of departure direction, that the sum of £92.19 be added to his exempt income and his protected income for the purpose of calculating his liability for child support maintenance. That sum was made up by taking £101.91 in respect of travel to work costs and adding £5.28 in respect of contact costs, and deducting the mandatory £15. 

9.	Mrs. F appealed against the decision made on 28 January 2006. The Tribunal, by the decision now under appeal to me, allowed that appeal to the extent of holding that, so far as travel costs are concerned, only item (a) in para. 5 above could be included in the amounts to be added to Mr. M’s exempt income and protected income by way of departure direction. 

10.	Mr M appeals on the ground that the Tribunal should have held that all four categories of expenditure which I referred to in para. 5 above had been properly added, by way of departure direction, to his exempt and protected income. 

11.	The relevant statutory provision is Regulation 13 of the 1996 Regulations (headed “costs in travelling to work”). It provides as follows:

“(1)	Subject to paragraphs (2) and (3), the following costs shall constitute expenses for the purposes of paragraph 2(2) of Schedule 4B to the Act where they are incurred by the applicant for the purposes of travel between his home and his normal place of work – 

		(a)	the cost of purchasing a ticket for such travel; 

(b)	the cost of purchasing fuel, where such travel is by a vehicle which is not carrying fare-paying passengers; or 

(c)	in exceptional circumstances, the taxi fare for a journey which must unavoidably be undertaken during hours when no other reasonable method of travel is available, 

and any minor incidental costs, such as tolls or fees for the use of a particular road or bridge, incurred in connection with such travel. 

(2)	Where the Secretary of State considers any costs referred to in paragraph (1) to be unreasonably high or to have been unreasonably incurred he may substitute such lower amount as he considers reasonable, including a nil amount. 

(3)	Costs which can be set off against the income of the applicant under the Income and Corporation Taxes Act 1988 shall not constitute expenses for the purposes of paragraph (1).”

12.	Regulation 13 makes it clear that only costs incurred for the purpose of travel between the applicant’s home and his “normal place of work” can be included in a departure direction. The Tribunal found that Mr. M’s “normal” place of work is in Canterbury. That would seem to be confirmed by the fact that Mr. M has claimed for the cost of driving there and back on 5 days a week. In his grounds for this appeal Mr. M says that “my places of work are numerous, each and every one of my client’s homes, each and every possible banking branch in my area, as well as travelling to London for monthly meetings.” However, it cannot possibly be contended that each of those places constitutes his “normal place of work.” In my judgment the Tribunal was right to hold that neither categories (c) nor (d) of the travel expenses referred to in para. 5 above could be the subject of a departure direction. 

13.	As regards category (b) (the charges for parking in Canterbury), the Tribunal said: 

“Car parking is not specifically mentioned in the Regulation as an allowable expense and in the Tribunal’s opinion it is neither a minor incidental cost nor is it an expense incurred in connection with the travel as it only arises after the journey has been completed.” 

The Secretary of State supports the Tribunal’s decision on the ground that the parking expenses in this case cannot be described as a “minor incidental cost”, having regard to the fact that they are more (£24 per week) than the cost of petrol (£20 per week). However, reg. 13 refers specifically to tolls or fees for the use of a particular road or bridge as an example of a “minor incidental cost”.  Some tolls are of the same sort of amount as the parking fees in the present case. I have in mind the tolls for use of the Severn Bridge (£5.10 per trip westbound), Second Severn Crossing (£4.90 per trip westbound), Humber Bridge (£2.70 each way) and M6 (£3.50). In CCS/2816/2004 the Deputy Commissioner referred to the cost (then £2.70 each way) of using the Sandbanks car ferry (across the entrance to Poole Harbour) as the sort of minor incidental cost which would qualify. I do not therefore think that the car parking charges in the present case were outside reg. 13 on the ground that they were not “minor”. 

14.	The most significant argument against Mr. M in relation to the car parking charges seems to me to be that they are such an obvious category of expense that, had it been intended to include them, they would have been specifically referred to. Yet, while specific reference is made to road or bridge tolls or fees, no reference is made to parking charges. It is arguable that, having regard to the specific reference to road or bridge tolls or fees, the words “incurred in connection with such travel” should (as the Tribunal held) be narrowly construed as relating only to costs incurred in the course of actually travelling by car. However, road or bridge tolls and fees are given merely as an example of the sort of minor incidental costs which can qualify. As a matter of the ordinary meaning of reg. 13 it seems to me that the parking charges were incurred by M “in connection with such travel” (i.e. travel between home and work) and were also incurred “for the purpose of” such travel within the earlier words of reg. 13. I do not think that the specific reference to road or bridge tolls and fees justifies cutting down the ordinary meaning. I therefore consider that the parking charges in the present case do fall within reg. 13. 

15.	Mr M has pointed out that the Tribunal said that “in [Mr M’s] coding notice for the tax year 2005-6 he has been allowed £712 against tax in respect of job expenses.” He says that that sum of £712 did not relate to travel expenses, but to other expenses. The Tribunal did not in fact say that it related to travel expenses, but said that it related to “job expenses”. But even if the Tribunal did mean that it related to travel expenses, its statement about the £712 was not essential to its reasoning. Its reasoning was simply that only the fuel consumed in travelling between his home and Canterbury fell within the wording of regulation 13. That was so whether or not the £712 related to travel expenses. 

16.	In my judgment, therefore, this appeal must be allowed, but only to the extent that the parking charges referred to in para. 5(b) above were rightly included, together with the fuel cost in para. 5(a), in the departure direction made by the decision maker. The expenses referred to in para 5(c) and (d) should not have been included (as the Tribunal held). The decision maker considered that it was just and equitable for a departure direction to be made in respect of the expenses which qualified under reg. 13, and the contrary was not suggested to the Tribunal or to me. 

17.	However, the Secretary of  State has pointed out that the decision assessing Mr. M’s net income under the main formula, which was not under appeal to the Tribunal, may have been incorrect. The sum of £287.50 gross per month in respect of “SPEC TA” was apparently included in Mr. M’s “gross earnings” for assessment purposes. It should not have been included if it was “a payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment”  (para. 1(2)(a) of Schedule 1 to the Child Support (Maintenance Assessments and Special Cases) Regulations 1992). The fact that it is treated as taxable would suggest that it is not paid, or not paid wholly, in respect of expenses wholly, exclusively and necessarily incurred in the performance of duties of employment. If that is so, however, then, in computing Mr. M’s “gross earnings” under the formula assessment, there should have been deducted the amount of any expenses wholly, exclusively and necessarily incurred in the performance of his duties: see R(CS) 2/96 at para. 25. This should therefore have led to items (c) and (d) in para. 5 above being deducted in calculating his income under the main formula assessment. 

18.	In para. 15 of his submission in this appeal the Secretary of State’s representative states that there may be certain additional sums (not related to travelling) which should have been deducted in computing Mr. M’s net income under the formula assessment. In para. 16 the Secretary of State’s representative says that he will ask the CSA to re-examine the way in which Mr. M’s earnings have been calculated under the main formula assessment. I do not know whether any such re-examination has yet taken place. The correct calculation of Mr. M’s net income under the main formula is not a matter which I have jurisdiction actually to decide, but I have made what seems to me to be an appropriate direction at the end of para. 1 above. 

	(signed on the original)	Charles Turnbull
		Commissioner
		20 November 2007