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Neutral Citation Number:
Reported Number: R(TC)1/08
File Number: CTC 2270 2007
Appellant:
Respondent:
Judge/Commissioner: Other Judges / Other Commissioners/Deputy Commissioners
Date Of Decision: 17/12/2007
Date Added: 16/01/2008
Main Category: Tax credits and family credit
Main Subcategory: couples and joint claims
Secondary Category:
Secondary Subcategory:
Notes: The claimants started living together in July 2004 and made a joint claim for working tax credit (WTC) and child tax credit (CTC), which was awarded from the date of cohabitation. Prior to that the claimant had been receiving WTC and CTC as a single parent with one child and his future wife had been working until shortly before she moved in with him. In a subsequent Annual Declaration, required under section 17 of the Tax Credits Act 2002, made in September 2005, the couple declared the wife’s income for 2004/05 as nil. In September 2006, pursuant to section 19(3) of the Act, Her Majesty’s Revenue and Customs (HMRC) issued decisions on their entitlement to WTC for 2004/05 based on their joint income for the whole tax year, reducing their entitlement by £750. The claimant appealed, arguing that income earned by his wife before they became a couple was irrelevant to their WTC entitlement after becoming a couple. The tribunal confirmed HMRC’s decision and the claimant appealed to the Commissioner submitting that the tribunal had failed to use its discretion. HMRC submitted, relying on sections 3 and 7 of the Act, that the tribunal’s decision was correct in law. Held, dismissing the appeal, that: 1. the tribunal was correct in law. The position where a claim period is less than a whole tax year is governed by regulation 7 of the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002, which provides that the income for the relevant period is a fraction of the income for the whole tax year, the fraction being the number of days in the claim period divided by the number of days in the tax year. The same fraction is then applied to the income threshold and other elements in the calculation (paragraphs 15 and 16); 2. the wording was unambiguous and even if it created an anomalous outcome in a case where it attributed a portion of income to a claim period in which no income was in fact earned, the outcome was not so absurd that Parliament could not have intended it (paragraphs 18 to 20).
Decision(s) to Download: R(TC) 1-08 ws.doc R(TC) 1-08 ws.doc