LS and RS v Commissioners for Her Majesty's Revenue and Customs (TC): [2017] UKUT 257 (AAC) ; [2018] AACR 2

Upper Tribunal Administrative Appeals Chamber decision by Judge Jacobs, Judge Markus and Judge Perez on 15 June 2017.

Read the full decision in [2018] AACR 2ws.

Judicial Summary

Reported as [2018] AACR 2

Tax credits and family credit – a section 16 appeal to a First-tier Tribunal lapses when a section 18 decision has been made

Tribunal procedure and practice – proper course for First-tier Tribunal to strike out the proceedings under rule 8

Both cases involved the Commissioners for Her Majesty’s Revenue and Customs (HMRC) making an initial decision under section 16 of the Tax Credits Act 2002, an appeal by the claimant against that decision and a further HMRC decision under section 18. In the first case HMRC terminated the claimant’s tax credits for the 2013-2014 tax year under section 16 and her appeal against that decision was dismissed by the First-tier Tribunal (F-tT) on 28 August 2015. However, by then HMRC had made a further decision on 2 March 2015 under section 18. The claimant says HMRC failed to notify her of the section 18 decision. The F-tT also appears to have been unaware of it. The second claimant received child tax credit and working tax credit for the tax year 2014-2015 and both awards were terminated by HMRC under section 16. Following the claimant’s request for a mandatory reconsideration HMRC reinstated the award of child tax credit and the claimant appealed to the F-tT. The tribunal confirmed HMRC’s decision as originally made and the HMRC then made a decision under section 18 for the same tax year. Both claimants appealed to the Upper Tribunal (UT) and a three-judge panel was appointed to hear the appeals as two recent UT decisions had been taken which not only conflicted which with each other but also with the UT’s general approach in such cases: RF v Her Majesty’s Revenues and Customs (HMRC) [2016] UKUT 399 (AAC) and JY v Her Majesty’s Revenues and Customs (HMRC) [2016] UKUT 407(AAC). Included among the issues before the Panel were whether a section 16 decision ceased to have effect after a section 18 decision was made for the same tax year, what effect that had on an appeal against the section 16 decision and what a F-tT should do about it.

Held, dismissing both appeals, that:

  1. a section 16 appeal to the F-tT lapses when a section 18 decision has been made (paragraphs 24 to 25);

  2. the proper course is for that tribunal to strike out the proceedings under rule 8 of the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules (paragraphs 52);

  3. there is no scope for that tribunal to deal with the appeal as an academic issue, but the position is different in the UT (paragraphs 33).

In both cases the Panel refused to set aside either decision of the F-tT even though they may have involved an error on a point of law

Published 4 July 2017
Last updated 4 October 2018 + show all updates
  1. Reported as [2018] AACR 2
  2. First published.