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Conclusions
Disposal
I am not convinced that the FTT realised that this was a case in which the information provided to the Secretary of State by HMRC meant that—subject to regulation 69(5)—it was required to treat the Father’s unearned income as nil.
That is understandable—the information was wrong—but the concluding words of regulation 69(3) mean what they say.
But even if the Tribunal erred in that respect, the error was immaterial.
For the reasons I have given, regulation 69(5) applied and entitled the FTT, “if satisfied that there is sufficient evidence to do so, [to] determine the amount of the [Father’s] unearned income by reference to the most recent tax year”, but on the basis that “any such determination must, as far as possible, be based on the information that would be required to be provided in a self-assessment return”.
That is what the FTT did and, in my judgment, the figures it arrived at cannot be faulted, not least because the terms of the Father’s permission to appeal prevent it.
My decision is therefore as set out on pages 1 and 2 above.
Authorised for issue | Richard Poynter |
Corrected under rule 42 |
- Heading
- Section 1
- Background and procedural history
- Regulation 69
- The possible interpretations of regulation 69(3)
- Self-assessment and child support
- Assessment of income for the purposes of income tax
- Under section 8 TMA 1970 , HMRC may require a person to make a tax return Under section 9, that return must include a self-assessment of the amount the person is chargeable to income tax and the amount payable by him ( i.e. , the amount so chargeable
- Under section 9ZB, HMRC may amend a return
- How self-assessment operated in this case
- other UK income not otherwise declared (described as property management income) of (£17,020 less expenses of £1,201)
- The maintenance calculation
- UK income not otherwise declared
- if the properties managed belonged to another person or company and were managed by him as a business—or if he carried out the management as an employee or as the officer of a limited company—then the
- In short, the Father’s income from property management cannot be neither earned nor unearned
- The Secretary of State’s submissions
- The decision in SB
- The decision in Gray
- Criteria for assessment
- The Explanatory Memorandum
- Interpretation of regulation 69(3)
- Relationship between regulation 69(3) and (5)
- Inconsistency
- The Father’s submissions
- The decision in PP
- Discussion
- Interpretation of regulation 69
- is to be determined by reference to
- The decision in SB
- Criteria for assessment
- Inconsistency
- “Doing HMRC’s job for them”
- In performing the latter task, the Secretary of State is doing her own job, not HMRC’s. Even if she decides that the figure in the non-resident parent’s self-assessment return is incorrect, that decis
- Incentivising fraud
- Alternative remedies
- has diverted income
- an “unearned income” variation is only available where the non-resident parent has actually received unearned income: see MQB v Secretary of State for Work and Pensions & SRB (CSM) [2021] UKUT 263 (AA
- it is of the essence of a “diversion” variation, that the diverted income has been diverted at source to another person or for another purpose and that the non-resident parent has therefore not receiv
- Reconciling the two parts of regulation 69(3)
- In short, the regulation unambiguously means what Judge Jacobs—with considerably greater concision than I have been able to manage—says it means in Child Support: The Legislation: see paragraph 17 abo
- Conclusion
- That, however, is subject to regulation 69(5)
- Conclusions