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Interpretation of regulation 69(3)
Interpretation of regulation 69(3)
Mr Najib accepts that regulation 69(3) could have been better drafted.
In particular, if the words “is to be determined by reference to information provided by HMRC” are to be interpreted as the Secretary of State submits, then it is arguable that the words “the amount of the non-resident parent’s unearned income is to be treated as nil” are otiose. Why provide for a non-resident parent’s income to be treated as nil if that would result would follow in any event from the application of the “by reference to” test?
On the other hand, if the “by reference to” test allows the Secretary of State to take information that has not been provided by HMRC into account, a question arises as to why should there be an exception where the non-resident parent has declared that his unearned income is nil?
Moreover, the plain wording of regulation 69(3) provides that where the information provided by HMRC shows no unearned income, then that information is conclusive: subject to regulation 69(5), the Secretary of State must treat the non-resident parent’s unearned income as nil.
“That being the case,” submits Mr Najib, “there is no proper basis upon which it can be said that it is not similarly conclusive where the information provided by HMRC shows a greater than nil figure for unearned income. There is no logical basis/rationale for such a distinction and Parliament could not have intended one.”
Mr Najib’s suggested solution is that the words at the end of regulation 69(3) have been added for emphasis. In effect, the regulation means that the Secretary of State must determine the non-resident parent’s unearned income as being what HMRC say it is and that is the case even when HMRC say that there is no such income.
- 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