HMRC refusing late MR (again)
I was wondering if there had been any update with this issue?
I have one that I thought was going to be a straightforward revision request. Client lost entitlement to Disability Element of WTC when transferring from DLA - PIP but did not inform HMRC of the change so there was an overpayment. He then lost the PIP appeal at FTT, went to Upper Tribunal and back to FTT, where PIP was eventually awarded so entitlement to Disability Element restored for the period of overpayment. All of this explained to HMRC who simply say that his MR is out of time and won’t be considered and there is no further right of appeal to HMCTS.
I notice that late MRs refusal is no longer on CPAGs test case page. What’s the best way forward please?
I was looking into a case like this just last week, there is helpful info on CPAG website http://cpag.org.uk/content/appeal-rights-and-tax-credits
Their advice is a letter of pre action for Judicial Review (there’s a template on the link) and/or lodge an SSCS5 stating that this should have a right of appeal per decision on DWP benefits, but they advise that it may be stayed behind their test case.
Thanks Alang that is really helpful, I had missed that on the CPAG site despite searching.
Is attempting to appeal to HMCTS and threatening JR at the same time mutually exclusive? Or wise?
I had the same question as I had never done a letter of pre action before, so I phoned the CPAG advice line who said I could do both at the same time. I didn’t want to get caught by the anti-test case rules so I went for the pre action of JR and lodged an appeal.
I only put them in last week so no response as yet, other than an email from HMRC legal dept to agree to a declaration so that they can communicate by email. so I’ll let you know in a couple of weeks
Have you considered arguing that your client’s application is a Section 21 Tax Credits Act request for review (not mandatory reconsideration) due to official error by DWP (in the decision that they previously made). The commentary on the Tax Credits (Official Error) Regulations 2003 in the Sweet and Maxwell confirm that DWP errors can constitute official error for tax credit purposes, presumably if it affects tax credit decision-making. There is a 5-year time limit, so that 1-month mandatory reconsideration limit would not apply.
I think it would be interesting if other advisers could contribute their thoughts on this alternative course of action.
The CPAG template letter says:
“The details of the matter being challenged
HMRC’s refusal on XX to extend the time limit under Section 21B of the Tax Credits Act 2002 for XX’s request of a review of HMRC’s decision to terminate her tax credits.”
What I can’t quite get my head round is that Reg 21 refers to decisions made under 14(1), 15(1), 16(1), 18(1) or (5), 19(3) or 20(1) or (4) but NOT Section 17, which is the Final notice.
Is this just because of the interaction with UC? Or something else?
Section 17 authorises the final notice i.e. the annual declaration of taxable income and personal circumstances in the previous tax year to enable a final decision to be issued under section 18. The Section 18 decision finalises the previous provisional award under section 14 and this can confirm the provisional award or amend it. Section 18 decisions are usually the ones that you submit mandatory reconsideration and appeals against. Section 17 is authorising a process rather than making a decision.
Section 21A and Section 21B are HMRC’s version of the mandatory reconsideration rules. Regulation 21 has been there since the inception of tax credits in 2003 (when you could just appeal without the need to jump through MR hoops). You can pursue your review application under Section 21 again and highlight that HMRC should have been considered the DWP official error (and still should). As I said earlier, it is worth pointing out the 5-year rather than 1-mmonth time limit. My experience of HMRC is that they do not know the Official Error Regulations and Section 21 exist until you bring it to their attention.
Judicial reviews cannot be allowed to proceed if there is an alternative legal method for challenging a decision. The Section 21 review (and subsequent appeal) is an appropriate alternative avenue of legal challenge and it just worries me that a HMRC barrister could identify this and get your Judicial Review terminated by the High Court without any consideration of the merits of the case.
Also, if you run this argument, you still get a new decision with reason why the official error rules don’t apply and potentially can still have your 3 months from the new decision date to apply for Judicial Review if they refuse to do the review and/or allow an appeal against the new decision (which is a decision for a First-tier Tribunal Judge and not HMRC).
I hope that it helps. If I just made things more complicated, let me know and I will try and clarify it again.
Many thanks Christopher, that is very clear
Just to add to Christopher’s post, the official error route would certainly seem appropriate in this case if he notified HMRC within one month of the PIP claim being determined in his favour, as they should have backdated the disability element in full under the Tax Credits (Claims & Notifications) Regs, Reg 26:
(1) In the circumstances prescribed by paragraph (2), the notification of a change in circumstances is to be treated as having been given on the date prescribed by paragraph (3).
(2) The circumstances prescribed by this paragraph are where–
(a) a notification is given of a change of circumstances in respect of a claim to working tax credit, which results in the Board making an award of the disability element or the severe disability element of working tax credit (or both of them) in favour of a person or persons; and
(b) the notification date is within [16 one month] of the date that a claim for any of the benefits referred to in regulation 9(2) to (8) or 17(2) of the Working Tax Credit Regulations is determined in favour of those persons (or one of them).
HMRC replied to me by e-mail in 2010 and confirmed that a ‘claim’ being ‘determined’ includes on supersession or appeal. So if the decision for the tax year was wrong because HMRC failed to backdate the disability element in line with this rule, then it should be revised on official error grounds. If claimant did not notify HMRC within one month of the UT, that could be more tricky due to the wording that claimant must not have contributed to the error.
Thanks Mark, very helpful as ever.
Just to clarify, when you say “the official error route would certainly seem appropriate in this case” are you advising that we should pursue the review application under Section 21 again through the normal channels (as per Christopher’s suggestion) rather than send the pre-action letter threatening JR?
HMRC were informed within one month of the tribunal award of PIP. The DWP was unusually quick to confirm the Tribunal award in this case and the award letters were sent along with the original MR request.
Yes, a request to revise the final decision(s) for the year(s) under s21 on official error grounds seems like a good idea in this case. But if HMRC refuses to do so, they are likely to say you do not have a right of appeal against a refusal to revise, and you are back in the same position of arguing that you can appeal, and/or the judicial review route.
PS Just to clarify, I meant you would be the same position with a different decision:
“It is clearly arguable that a refusal to revise a decision because it is considered that there is no official error is a decision “under” the Regulations in respect of which there is a right of appeal under section 38.”
2013 UKUT 199 AAC para 50
The main point re late appeals in this case is no longer good law, but this comment is still valid.
Thanks again Mark.