Case summary - Single mother claimed as single person with 3 children - awarded CTC and WTC - now removed after investigation and IUC as found married and although separated not likely to remain permanent as she stated "hope to reconcile" at interview and he has no other permanent address - continuing to use marital home for financial details etc. Overpayment £12855 plus penalty £500 imposed -suggest settle £13360 without further action.
This is my first WTC/CTC appeal and I would like to proceed with caution.
Points I wish discussed or commented on please
- she claimed as a single person but this can be treated as couple claim per TC Regs S.4(1)g
- do Inland Revenue have duty to offset as none been done per R(IS)25/98
- "likely to be permanent" - no reconciliation taken place and he is now moving to Canada - does the fact that she should have claimed as a couple just becasue they are married override the likely to be permanent statement.
Any other comments or suggested areas to look at very welcome - thanks.

The Tax Credits Handbook from Low Incomes Tax reform Group has some useful information on how Revenue consider situation of married couples still living in same property - details of book at http://www.litrg.org.uk/news/index.cfm?id=87

Thanks I'll try to get my hands on a copy

The following might help

http://www.inlandrevenue.gov.uk/manuals/ccmmanual/CCM6000.htm

You raise 3 matters:

s4(1)G)of TCA 2002. This allows one of a couple to start a claim for a couple. Your post suggests that client claimed as a single person, but was later held in fact to be part of a couple. Are you wondering if you can argue that the claim was always a couple claim? I think this would depend on whether the man was entered on the TC claim form so far as needs and income are concerned. I assume not!

So far as I am aware, there are no offset rules in TC.

Not sure what to say about the "hope to reconcile" problem. I would suggest its the facts at the time that count, rather than the clients predictions, which seem to have been incorrect. If client initially claimed as a single person, but at that time was a couple, the claim was always dead. If she was at the time single, but later became a couple, the claim is dead from that point.

Steve

The more I look at this the more mad it makes me.

"Hope to reconcile". So what. I'd like a cosy night in with Angelina Jolie but it doesn't mean its going to happen. The "hopes" of one member of a couple don't force the actions of the other and "hope to reconcile" only shows a wish not an intent. As to his lack of a permanent address, again so what. If he's bound for distant shores its not likely he's going to shell out for a mortgage or a bond in the time thats left.
As to using the home for financial details even their own guidelines acknowledge that this can be a neccessary measure when needing to reach a financial settlement-selling the house. That need can arise for other reasons and isn't restricted to the examples given by the guidelines.

If this was a benefit situation I think an IUC would strongly indicate the DWP were sure of themselves. Because its "compliance" I'm inclined to believe its a snow job.

Power to your elbow and I hope you kick this decision where it hurts

CAS

If you give me your contact details on here or via our website contact pages at www.litrg.org.uk then I will get you the relevant pages from the book that Jane Hayball referred to earlier.

Does sound as if injustice is being done.

My details are:
Emma Leishman
Welfare Benefits Officer
Social Work Office
Carronbank House
Carronbank Crescent
Denny
FK6 6GA

emma.leishman@falkirk.gov.uk

Everyone's help is appreciated. The appeal is to be heard 150205 - I shall post the outcome on this discussion page once known. For additional info - Tax Credits have not used any benefit case law or law - only Tax Credit Act 2002 s.3,5,19,28. I will use benefits law. Thanks.

You don't say what type of law the Inland Revenue used as the basis for their decision. It makes a difference. Some of the Tax credit regulations relating to couples are based on Income Tax law. Income Tax law holds that a couple who are married are to be treated as a couple, regardless of whether they are living together. In general benefits caselaw, it is less relevant whether a couple are legally married or not. What matters is whether they can be said to be maintaining the same household "as though they were husband and wife." The main guidance for deciding this is in R(SB)17/81.
If it seems the Inland Revenue has referred to benefits caselaw in making their decision, you might be able to make a good case to appeal.
The only two tax credit appeals my organisation has dealt with so far both concerned cohabitation. It was apparent that the IR were using the guidance contained in R(SB)17/81. However,we were told by the IR officials that they "follow an audit trail" in investigating cohabitation cases. What this means in practice is that they look only for printed records and don't carry out quite as thorough an investigation as the DWP does for cohabitation cases, (no surveillance, interviewing neighbours or relatives, for example). This can result in gaps in their evidence, which an adviser might be able to use to advantage.

I have been following the discussion on your case and I was wondering if I could ask a question?

In the list of sections of the TCA being used by the Revenue no mention is made of S.31 which I assume is the Section of the Act they used to impose a penalty. Can you tell me if this appeal on 15th Feb is concerned with the issue of “living together” alone or is the issue of the penalty also before the tribunal?

The penalty will be appealed separately

Update

Case finally won.

This case has been at appeal hearing 6 times over past year and HMRC finally conceded in a further supplementary submission I received yesterday. Although they have asked tribunal to conclude this!? Presumably chair will tell them to just send out a new notification to client and that will be the end of it.

They are stating they wish to amend the decision based on Tax Credits Act 2002 Section 21 (Official Errors) and basically conclude that client right to apply as single person at that time and no overpayment (of £13000 to be repaid).

As a point of interest, something that cropped up during hearing - the chair pointed to CPC/3891/2004 and requested if HMRC had considered any bearing this may have on part period of this particular appeal. This was in reference to a Pension Credit claim where Pension Service concluded living together case but no outcome decision was made therefore no appealable decision. HMRC agreed that a closure letter had been sent to advise they found to be LT but as no outcome decision sent no appealable decision, it then follows that therefore no overpayment either for that period and therefore original decision stands (i.e. award).

The District Chair later heard this case and she disagreed with the above having any bearing but it was just to point it out in case this comes up for anyone.

Emma

A summary of the decision Emma highlights, CPC/3891/2004, is available in the briefcase area of rightsnet. The summary includes a link to the full decision itself.