[2023] UKUT 238 (AAC)

Mr Najib submits that, as a matter of construction, paragraph (3) of regulation 69 establishes the general rule for the determination of unearned income and paragraph (5) sets out the exceptions to it. “Having done so,” he submits, “there is no scope to say that Parliament intended yet further exceptions - but for some reason chose not to set them out expressly”.

He further submits that:

“Regulation 69(5) not only sets out the specific scenarios in which the SSWP may determine the unearned income herself, it also sets out the rules as to when and how she is to do so - namely (a) she may decide to determine the unearned income herself "if satisfied that there is sufficient evidence to do so" and (b) if she decides to do so "and 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". No such rules are set out in regulation 69(3). This clearly indicates that Parliament did not intend for the SSWP to ever determine the unearned income herself under regulation 69(3). This would and could only ever happen under regulation 69(5).”

Put another way, if regulation 69(3) allowed the Secretary of State to determine the unearned income of a non-resident parent for herself, regulation 69(5) would be otiose: Anything that could be done under regulation 69(5) could be done under regulation 69(3).

It is largely for these reasons that the Secretary of State does not accept the Second Interpretation. If the legislator had intended that the Secretary of State could disregard the information provided by HMRC if there was clear evidence that it was incorrect, then, it is submitted, regulation 69(5) would have said so. Even if that objection were to be overcome, regulation 69(3) would still provide no criteria for the assessment to be carried out. Further, a judgment would need to be formed as to just how “clear” the contrary evidence was.