[2025] UKUT 166 (AAC)

he was in fact an eligible person, because tax credits were not payable in respect of the relevant period.

Taking the second point first, in order to be an eligible person, s.13 of the 2014 Act requires that “at the date of the declaration no other relevant childcare support is payable to the person for any relevant period” and “relevant period” is defined as including the date of declaration. Here, the date of declaration was 14 March 2019 and tax credits continued until 19 March 2019.

Furthermore, even had the first entitlement period for TFC started on 14 March 2019 (meaning that the tax credits award would have terminated on 13 March 2019), at the point of the declaration tax credits were still, at that point, ongoing. It was only once the declaration was held to be a valid declaration that HMRC subsequently terminated the tax credits award retrospectively from a day prior.

On the first point made by the Tribunal, that it was sufficient that HMRC was “satisfied” that the claimant was an eligible person, it was submitted that HMRC was well aware of his tax credits award, as it also administers the tax credits system. That can also be seen by the fact that it immediately terminated his tax credits award upon the TFC application being made.

HMRC could not therefore have been “satisfied” that the claimant was an eligible person.

S.30(11) of the 2014 Act provides, that if HMRC later determines that the declaration was not valid, that will not affect the tax credits termination. However, in the claimant’s case, HMRC was never satisfied that there was a valid declaration.

What actually happened was that HMRC simply set up its computer system to terminate tax credit awards automatically despite not being satisfied that a valid declaration was made.

Although relating to a different issue, the House of Lords held in Hinchy v Secretary of State for Work and Pensions [2005] UKHL 16 that information provided to one branch of a government department does not allow one to assume that other branches are aware of that information. However, as mentioned above, the branch of HMRC dealing with the TFC claim clearly did know about the claimant’s tax credits.

Furthermore, there are persuasive arguments that Hinchy may not apply any more, see SK v Department for Communities (ESA) [2020] NI Com 73 at [48]:

“48.

There is a vast difference between the manual administrative systems that pertained in the days before computerisation and the technology available to the Department today. Hinchy addressed a disjointed Departmental administration in the period from 1993 to 1998 passing information about DLA awards around on pieces of card, where one branch did not know what the other was doing. The evidence in this case indicates that that system has been consigned to the past. Claimants are entitled to assume that when they receive their decision in relation to one benefit, the Department’s modern computerised systems will not just have communicated the decision to them, but also to any other branches of the Departmental administration where that decision has an impact.”