File no: CCS 718 2002
DECISION OF THE CHILD SUPPORT COMMISSIONER
- I allow the appeal. The appellant (to whom I refer as C) is the mother and parent with care of a qualifying child for whom a child support maintenance assessment has been made. The first respondent is the Secretary of State, the authority responsible for making the assessment. The second respondent (to whom I refer as A) is the father and absent parent of the child for whom the assessment was made.
- C is appealing with my permission against the decision of the London (Whittington House) appeal tribunal on 7 March 2001 under reference U 42 160 2000 00737. The tribunal technically allowed the appeal to it by C, but it did so only on limited grounds, and therefore C has pursued her appeal further to the Commissioner.
- For the reasons below, the decision of the tribunal is wrong in law. The appeal must be referred to a new tribunal. That tribunal should reconsider C’'s appeal in the light of the directions in this decision.
Background to the appeal
- The starting point of this appeal is a decision of the appeal tribunal on 25. 7. 197. In that appeal, C won an appeal against a decision that A was not liable to pay child support maintenance to C for their child. As a result of that tribunal’'s decision, A was ordered to pay £86.49 a week to C. A new decision was made by the Child Support Agency on 18. 9. 2000. This was that A should pay the weekly sum of £53.86 from 4. 5. 2000.
- C appealed to the tribunal against that decision. Her main ground of appeal was that she did not agree with the view taken by the Agency about the opening and closing stocks in A’'s business accounts. The Secretary of State did not support the appeal. On the issue of the accounts, it was submitted that the accounts had been accepted by the Inland Revenue and that under the “"new”" rules that applied after 1999 this was the right approach. But the Secretary of state''s representative drew attention to a mistake made in calculating the amount of maintenance.
- The tribunal decided that, subject to correcting the error pointed out by the secretary of state''s representative, the decision had rightly relied on the Inland Revenue’'s acceptance of the accounts. While it allowed the appeal because of the error, it dismissed the substance of C’'s argument to it.
Grounds of appeal
- C objected to the “"new”" rules about calculating accounts. She also raised a number of procedural and other objections. As I am allowing this appeal, I do not consider them.
- The Secretary of State did not support her appeal. The secretary of state''s representative drew attention in detail to the changes in the rules about assessing income in 1999. In particular, there are new paragraphs 2A to 2C in the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 (the MASC Regulations) from 4 October 1999. It was submitted that officer making the new assessment in 2000 was bound to have regard to those provisions. They did not apply in 1997, so there was also bound to be a new assessment. The tribunal also applied those new rules and was right to do so.
- A has made no submission on this appeal.
My decision
- As was rightly pointed out both by the secretary of state''s representative and the tribunal, new rules apply to the calculation of the income of the self-employed from 4 October 1999. The new rules make the starting point of the calculation of the income of a self-employed individual the figures agreed by the Inland Revenue. This reflects the fact that the income tax payable by a self-employed individual is now self-assessed. The Inland Revenue may agree the self-assessment or it may disagree, but it is the self-assessed income of a self-employed earner with which the tax calculations, and therefore now the child support maintenance calculations, start.
- C objected to the approach that the Inland Revenue figures had to be used.
On this she is right, and the tribunal is wrong. The assessment must now start with the Revenue figures, but it does not have to stay with them. In the submission to the tribunal, the secretary of state''s representative stated of the changes in 1999:
“"Due to this legislation the Child Support Agency have to accept the calculations accepted by the Inland Revenue.”"
C challenged that. She also challenged the submission to the Commissioner by the secretary of state''s representative that stated:
“"it is my submission that the decision maker was bound to have regard to the provisions of paragraphs 2A to 2C of Schedule 1 because they were in force at the time…”"
- There is an important difference in the submission to the tribunal and the submission to me. The submission to the tribunal was in absolute terms. The submission to me was more carefully worded and was not in absolute terms, though C may not have noticed the difference. The submission to the tribunal was wrong in law. The submission to me was right, but it omitted one important point, and with that omission understandably misled C. The omission is that the secretary of state''s representative made no reference to paragraph 5A of the MASC Regulations, another new regulation added from October 1999. Regulation 2A is specifically made subject to regulation 5A, as is paragraph 2B. For that reason, I reject the secretary of state''s representative’'s submission to me.
- Paragraph 5A(3) provides:
Where, in the opinion of the child support officer, information as to the total taxable profits of the self-employed earner which would satisfy the criteria set out in subparagraphs (1) and (2) of this paragraph does not accurately reflect the normal weekly earnings of the self-employed earner, the earnings of that earner can be calculated by reference to paragraphs 3 to 5 of this Schedule.
This provision is a general overriding provision to paragraphs 2A to 2C and allows the “"old”" rules in paragraphs 3 to 5 to apply. Those are the rules that the 1997 tribunal applied. In other words, paragraph 5A(3) allows for exactly the result that C is seeking. She persuaded the 1997 tribunal that A’'s figures were wrong. She tried to do that with the tribunal in 2001.
- The tribunal in 2001 was wrong in law in stating that it had to follow paragraph 2B of Schedule 1 to the MASC regulations without considering the exception, and was therefore wrong in refusing to consider whether, in the light of paragraph 5A(3), C’'s appeal could succeed on that ground. The case must go to a new tribunal to consider if paragraph 5A(3) should apply and if paragraphs 3 to 5 should apply.
- All parties are directed to put forward any written information, evidence or submissions relevant to the consideration of A’'s income under paragraphs 3 to 5 and 5A to the new tribunal in good time before the rehearing so that it may consider the matter fully. The parties are warned that failure to provide information or failure to attend the tribunal hearing may result in adverse inferences being drawn against the party not replying or not appearing in the light of evidence that is available.
David Williams
Commissioner
12 September 2002
[Signed on the original on the date shown]
