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Stop notices and withdrawn UC claims

Elliot Kent
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HMRC v AB [2021] UKUT 209 (AAC)
https://assets.publishing.service.gov.uk/media/61b32ab0d3bf7f0551f2d426/CTC_2193_2019-01.pdf

An interesting case which confirms the point that if a UC claim is made but withdrawn before the DWP issue a stop notice, entitlement to existing legacy benefits continues.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 Moreover, that determination needed to be made in the context of a live claim, rather than one which had been withdrawn (para 31).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HMRC v LH [2018] UKUT 306 (AAC) could be distinguished because in that case the claimant had critically withdrawn their UC claim after the stop notice was issued.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.

Stainsby
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I represented in a case that was not on all fours with this but has some interesting parallels

My client ( a Polish national) was getting ESA and was bullied by a DWP “advisor” to claim UC after she failed the WCA

She claimed UC on 21 /11/2018
The stop notice was issued on 28/11/2018
UC determined that she failed their HRT on 7/12/2018 and refused the UC claim

HMRC terminated my clients child tax credit wef 21/11/2018 although child tax credit was subsequently re- awarded from 04/01/2019 on a fresh claim because of the SDP gateway.
 
HMRC relied on LH in all their submissions to the FtT,. They sent two presenting officers to the Tribunal which heard the case on 18/11/2019.

The Tribunal allowed the appeal because UC had determined that my client did not meet the basic condtions as the was held to be not in Great Britain.

The PO’s who presented their case at the Tribunal could not get their heads around the not in GB determination and twice asked me whether my client lived in the UK.

HMRC asked for a statment of reasons and subsequently applied for leave to appeal to the UT.  The FtT refused the application and HMRC did not make a renewed application

Seems like HMRC thought they had a stronger case with AB but evidently they thought wrong

chacha
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Elliot Kent - 10 December 2021 10:37 PM

*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.


Interesting, as the UT judge also expressed a view on fact finding, but still…..... it is sound reasoning and in my opinion, exactly the correct decision.

Stainsby - 14 December 2021 11:52 AM

The PO’s who presented their case at the Tribunal could not get their heads around the not in GB determination and twice asked me whether my client lived in the UK.

  Don’t know whether to laugh or cry!!

Stainsby - 14 December 2021 11:52 AM

Seems like HMRC thought they had a stronger case with AB but evidently they thought wrong

Very wrong.

Elliot Kent
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So now to muddy the waters, Judge Jacobs has issued decisions in these two cases:

JL v Calderdale MBC & SSWP [2022] UKUT 9 (AAC)
https://www.gov.uk/administrative-appeals-tribunal-decisions/jl-v-calderdale-metropolitan-borough-council-and-secretary-of-state-for-work-and-pensions-uc-2022-ukut-9-aac

SK v HMRC & SSWP [2022] UKUT 10 (AAC)
https://www.gov.uk/administrative-appeals-tribunal-decisions/sk-v-commissioners-for-her-majestys-revenue-and-customs-and-secretary-of-state-for-work-and-pensions-uc-2022-ukut-10-aac

In the JL case, he reaches the opposite conclusion to Judge Mitchell. Withdrawal of a UC claim does not have the effect of preventing a stop notice being validly issued.

In the SK case, he reaches the conclusion that a stop notice can be validly issued where there is an appearance of entitlement to UC even if the claimant is subsequently determined not to meet the basic conditions of entitlement (for instance) due to not having a right to reside.

I expect I will have some more to say about these once I have had time to digest.

Charles
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This case may be of interest to readers of this thread.

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HB Anorak
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Paras 39 and 52 slightly at odds with what Judge Jacobs has said about being present in GB maybe?

Charles
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Yes. To put it more generally, Judge Poynter seems to be saying that for the Secretary of State to be satisfied that the basic conditions of entitlement are met, she must be satisfied that they are met properly and not just superficially, as Judge Jacobs argues.

Dan Manville
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Charles - 16 February 2022 10:33 PM

Yes. To put it more generally, Judge Poynter seems to be saying that for the Secretary of State to be satisfied that the basic conditions of entitlement are met, she must be satisfied that they are met properly and not just superficially, as Judge Jacobs argues.

Back in the days of yore, the Court of Appeal rejected a construction very similar to that assumed in SK by Judge Jacobs in Abdirahman the first R2R case that got to the senior courts. I remember it well cuz one of the appellants was a client of a colleague.

Excuse my not digging it out but I’m on hold with my non tyipng hand.

Mike Haran
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Does anyone know if SK is going to the Court of Appeal?

Does anyone know of any stop notice cases relating to the Right to Reside
awaiting hearing in the Upper Tribunal?

Thanks