[2023] UKUT 175 (AAC)

In the light of the disclosure made by the father in the proceedings before the First-tier Tribunal, the facts of the case are now fairly clear, although no “HMRC figure” has been produced in respect of 2016/17 or 2017/18 so as confirm that the figures provided by the father are correct. Whether the Secretary of State sought the HMRC figure for 2016/17 for the purpose of the annual review effective from 9 September 2018 I do not know.

One area of contention has been the amount of the redundancy payment received by the father. The mother has pointed out that the sum he received from his former employers on 16 December 2016 was £49,466.14 (page 170), but that may have included a non-taxable element. The taxable element appears to have been £31,787, according to what the father’s employers apparently told HMRC (page 192) and it is the taxable element that is important. It is unnecessary to check whether that figure represented only the taxable element of the redundancy payment, as the father says, or whether it might have included, say, accumulated holiday pay, because what matters is the total taxable income.

In any event, there appears to be an error in the father’s tax calculation for 2016/17 which would be resolved by obtaining the HMRC figure. The figure of £81,725 taxable income includes £75,278 “pay from all employments” (page 123). However, that appears to be the gross amount of pay (including the taxable element of the redundancy payment) received from his former employers (see page 192) and does not include the £1,750 at least notionally received from his own company in February and March 2017 (see the payslips at pages 78 and 79, showing national insurance deductions). A deposit approximating to the net February payment is recorded in a bank statement on 21 February (page 161). I have not found the March payment in the bank statements. This is consistent with the father in fact living off his redundancy payment while retaining money in the company, but the payslips do suggest that, if an HMRC figure were obtained, it would be at least £83,475.

In any event, the father’s taxable income in 2016/17 was at least £81,725 (which was the figure agreed by the parties at the hearing). It is not in dispute that the HMRC figure for the previous year, 2015/16, was £66,319.62 and it is also not in dispute that, in 2017/18, the father received, at least notionally, taxable pay of £11,500 and dividends of £50,000.