![[2023] UKUT 238 (AAC)](https://backend.juristeca.com/files/emisores/logo_3a2BKne.png){kind=logo}
The decision in SB
The decision in SB
As a preliminary observation, Mr Najib refers me to the decision of Upper Tribunal in SB v Secretary of State for Work and Pensions and TB (CSM) [2016] 84 (AAC), in which Upper Tribunal Judge Mitchell stated:
“2. Under the new scheme, the amount of a parent’s child support maintenance liability depends on the parent’s gross weekly income. The 2012 Regulations confer an important function on H.M. Revenue & Customs (HMRC) in the fixing of a parent’s gross weekly income. This involves HMRC supplying what is referred to by the 2012 Regulations as a “HMRC figure”.”
The “HMRC figure” is a defined term used in the calculation of a non-resident parent’s earned income. Earned income is to be the figure (provided by HMRC) as “historic income”—the income on which the non-resident parent was charged income tax during the last relevant tax year—unless the rules permit the Secretary of State to assess it on the alternative, “current income” basis: see further paragraphs 28 et seq. below.
The Secretary of State’s submission is that her interpretation provides consistency between the treatment of earned an unearned income. Why should information from HMRC be taken as conclusive in the former case, but not the latter?
- 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