Stop notices and withdrawn UC claims
HMRC v AB  UKUT 209 (AAC)
An interesting case which confirms the point that if a UC claim is made but withdrawn before the DWP issue a stop notice, entitlement to existing legacy benefits continues.
The appellant had an ongoing award of tax credits. The FtT found* that the following events occurred:
-On 6 October 2018, she made a claim to UC.
-On 7 October 2018, she withdrew that claim due to advice from the CAB
-On 9 October 2018, UC issued a ‘stop notice’ under reg 8 of the UC (TP) Regs instructing HMRC to terminate tax credit entitlement after 5 October 2018 due to the UC claim.
HMRC complied with the stop notice and terminated the tax credits award. The appellant appealed arguing that the stop notice was ineffective and her tax credits should have continued. The FtT agreed. HMRC appealed to the UT.
The UT accepted that the stop notice was ineffective. Reg 8 only allows a stop notice to be issued in circumstances where a claim for UC had been made and where it had been determined that the basic conditions of entitlement were satisfied. That required a formal determination, even in a clear case (para 20). Moreover, that determination needed to be made in the context of a live claim, rather than one which had been withdrawn (para 31). On the facts found, there was no live claim for UC when the stop notice was issued so it was ineffective to end the appellant’s tax credits.
It also seems to be inherent in the reasoning in this case that a claimant is entitled to challenge a decision to terminate their tax credits (or housing benefit) following the issuing of a stop notice on the grounds that the DWP-issued notice itself was invalid or procedurally deficient. HMRC do not appear to have even made the argument that they were required or entitled simply to take the notice at face value.
HMRC v LH  UKUT 306 (AAC) could be distinguished because in that case the claimant had critically withdrawn their UC claim after the stop notice was issued.
*Perhaps a more inquisitive FtT might have asked how exactly it came to be that she made a UC claim on Saturday 6 October 2018 and then withdrew it on Sunday 7 October 2018 having received advice from the CAB at some point in between those two events, but apparently the FtT accepted that this was the case and HMRC did not challenge those findings.