CH_1330_2008 [2008] UKSSCSC CH_1330_2008 (21 October 2008)

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Cite as: [2008] UKSSCSC CH_1330_2008

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[2008] UKSSCSC CH_1330_2008 (21 October 2008)


     
    DECISION OF THE SOCIAL SECURITY COMMISSIONER
  1. My decision is given under paragraph 8 of Schedule 7 to the Child Support, Pensions and Social Security Act 2000:

    2. The decision of the Harrow appeal tribunal under reference 035/08/00033, held on 4 March 2008, is not erroneous in point of law.
    For the avoidance of doubt, the tribunal's decision is clearly intended to apply to both housing benefit and council tax benefit.
    REASONS
    A. Introduction
  2. The issue in this case is whether the travel expenses paid to the claimant by her employer are wholly, exclusively and necessarily incurred in the performance of her duties. The local authority decided that, for the most part, they were not. The tribunal allowed the claimant's appeal and decided that they were. A district chairman gave the local authority leave to appeal to a Commissioner. The issue for the Commissioner is whether the tribunal went wrong in law.

  3. Mr Commissioner Pacey directed an oral hearing. I took the hearing in Field House on 15 October 2008. Mr S Cullimore appeared on behalf of the local authority. The claimant attended, accompanied by a friend, and spoke on her own behalf. I am grateful to them both for attending the hearing and for their contributions.

    4. B. The law
  4. Regulation 35 of the Housing Benefit Regulations 2006 provides:

    5. 'Earnings of employed earners
    35.-(1) Subject to paragraph (2), "earnings" means in the case of employment as an employed earner, any remuneration or profit from that employment and includes-
    …
    (f) any payment made by the claimant's employer in respect of expenses not wholly, exclusively and necessarily incurred in the performance of the duties of the employment, including any payment made by the claimant's employer in respect of-
    (i) travelling expenses incurred by the claimant between his home and place of employment; …
    (2) Earnings shall not include-
    …
    (b) any payment in respect of expenses wholly, exclusively and necessarily incurred in the performance of the duties of the employment; …'
  5. Regulation 25(1)(f)(i) and (2)(b) of the Council Tax Benefit Regulations 2006 is to the same effect. For convenience, I will refer only to regulation 35.

    6. C. The facts
  6. These have not been disputed and there was no basis to do so.

  7. The claimant has received housing benefit and council tax benefit since 2003. She has since left her employment, but at the time worked as a care attendant for an organisation. She provided care for those who are elderly or disabled, including disabled children. This was respite care for the full-time carer. She might have to use a first-aid kit, aprons, gloves and so on, and carried a supply with her in her car. She picked up further supplies from the employer's office as required.

  8. The claimant's contract of employment shows that:

    9. •    She was paid for at least 16 hours a week, although she might not be allocated work for all those hours. (She limited her hours to 16 so as not to affect her tax credit.)
    •    Her 'place of work' was described as being 'at any location within the London Borough of …'
    •    She was required to attend a staff meeting every other week. It was usually held on a Monday afternoon. The contract made no provision for its location. (Her actual attendance at the meeting was less regular than this. She was not strictly contracted to work on a Monday afternoon and, if she was working that day, she might be with a client and unable to attend.)
  9. The employer's premises consisted only of an office for the manager and receptionists. A room was hired for meetings.

  10. The organisation of the claimant's work was as follows. Her programme for the following week was delivered to her home by post and she travelled to her clients from home. Her hours allowed 15 minutes travel time to a client. She might then have to travel on to another location, but this was not always so. If she had to report a problem to the employer's office, she would use her mobile (if it was urgent) or her home phone (if it was not). Once her duties were over, she travelled home. She completed her claim for expenses at home and posted it to her employer. She was paid expenses for all the miles that she travelled in any day of work.

  11. The employer wrote to the local authority explaining that Her Majesty's Revenue and Customs described the claimant as an itinerant worker and accepted that her travel expenses were deductible for income tax purposes.

    12. D. The local authority's decision
  12. The local authority decided that the claimant's place of employment for regulation 35 was the first place she went to work on any particular day. Expenses for that journey therefore counted as earnings under regulation 35(1)(f). Expenses for travel thereafter did not and were excluded under regulation 35(2)(b).

    13. E. The tribunal's decision
  13. The tribunal allowed the appeal. The chairman has provided a clear and carefully reasoned full statement of her tribunal's decision.

  14. The chairman began by recording the uncontested findings of fact. She then identified and summarised the relevant legislation. Next she referred to section 337 of the Income Tax Earnings and Pensions Act 2003:

    15. '337 Travel in performance of duties
    (1) A deduction from earnings is allowed for travel expenses if-
    (a) the employee is obliged to incur and pay them as holder of the employment; and
    (b) the expenses are necessarily incurred on travelling in the performance of the duties of the employment.'

    The chairman also referred to Her Majesty's Revenue and Customs' guidance manual. That manual refers to travelling or itinerant workers for whom all travel expenses are deductible as being incurred wholly, exclusively and necessarily in the performance of their duties. The chairman concluded by deciding on the facts that the expenses fell within regulation 35(2)(b).

    F. What Mr Cullimore said
  15. Mr Cullimore's presentation followed closely his written grounds of appeal.

    16. I - Did the decision apply to council tax benefit?

  16. Mr Cullimore criticised the decision notice for referring only to housing benefit and not including council tax benefit. He is strictly correct. However, the law is the same for both and I am sure that the tribunal did not intend to give a decision only in respect of housing benefit. It can sometimes be difficult for tribunals and Commissioners to tell which benefits are actually the subject of the appeal. It is not, therefore, surprising if sometimes a decision deals only with one benefit. This is not a ground on which I would set aside the tribunal's decision. The proper course, if there was any doubt on the matter, was to ask the tribunal to correct the notice to include council tax benefit, which must always have been intended. Mr Cullimore told me that he would not have relied on this mistake as the only ground for appeal and would have asked for a correction.

  17. In order to remove any doubt I have declared as part of my decision that the tribunal's decision covered both benefits. That will save the need for a correction.

    18. II – A place of employment

  18. Mr Cullimore argued that travel between the claimant's home and place of employment had to be treated as earned income. That is correct.

  19. He then argued that regulation 35(1) did not allow for a different treatment of itinerant workers. That is not correct. Regulation 35(1) only applies if the claimant has a place of employment. If there is no place of employment, the provision does not apply. As a matter of interpretation, it is permissible to imply the words 'if any' into regulation 35(1)(f)(i) so that it reads: 'travelling expenses incurred by the claimant between his home and place of employment if any'. See the approach taken by Millett J in Coates Brothers plc v General Accident Life Assurance Ltd [1991] 1 WLR 712 at 717.

  20. I have no difficult in accepting the possibility of a person having no place of employment within the meaning of regulation 35(1)(f)(i). Of course, in one sense everyone who works must work somewhere. However, that is not the sense of the regulation, which is referring to a fixed place at which work is done or a base from which work is undertaken. The distinction is between (i) travelling done in order to get to work and (ii) travelling done while working. Put into the context of this case, the issue is whether, when the claimant left her home, she was travelling (i) in order to take up her duties or (ii) as part of her duties.

  21. The claimant's contract of employment provided that the claimant was to work anywhere within the London Borough. Mr Cullimore did not argue that that was her place of employment within the regulation. He described that as an odd way of defining a place of employment. I agree. The contract was merely indicating the geographical limits within which the claimant had agreed to work. It was not identifying any one place as a place of employment.

  22. Mr Cullimore argued that the claimant's place of employment was fluid, being different each day. I am willing to accept that as a theoretical possibility. However, it would be rare. The tribunal analysed the evidence as showing that the claimant did not have a place of employment and was travelling on her duties as soon as she left home. It was entitled to analyse the evidence in that way. I cannot say that it was wrong in law to do so. Indeed, it seems to me that that is the natural way to analyse the evidence.

    23. III – An individual approach

  23. Mr Cullimore argued that if different treatment were allowed for itinerant workers, it should be applied on an individual basis and not by using a fixed allowance. I accept that every case must be decided on its own facts. I agree that a payment made by an employer should only be accepted as expenses to the extent that it reimburses a cost. Any element of profit that is included cannot be an expense. In the case of using a car, the expenses fall into two parts. First, there are expenses that are directly and only related to the employment. The most obvious is fuel. Second, there are other expenses that relate to the running of the car and need to be apportioned between business and private use: R(CS) 10/98 at paragraph 12. These include insurance, road tax, servicing, and the replacement of tyres and exhaust. Organisations such as the AA make detailed calculations of running costs. Inevitably, there is an element of generality in those calculations. However, Her Majesty's Revenue and Customs are alert to the possibility that a payment of expenses may conceal an element of remuneration or profit. Neither claimants nor benefit officers are in a position to undertake these detailed calculations with precision and need not do so. If the figure comes from a reputable source and has been accepted by Her Majesty's Revenue and Customs, the local authority and a tribunal are entitled to accept it without further analysis. I note in this case that the mileage allowance is less than the figure that will be accepted for tax purposes.

  24. In this case, the tribunal simply accepted the 35 pence a mile as within regulation 35(2)(b). That was permissible in law.

    25. IV – How the legislation might have been worded

  25. Finally, Mr Cullimore argued that the housing benefit and council tax benefit law could have been worded in the same way as that for income tax if the same result was intended. I do not believe that the chairman was saying that the law was the same for both income tax and benefit law. What she said was that the 'wholly, exclusively and necessarily' test applied in both and that was correct – see section 336(1)(b) of the 2003 Act. She then referred to section 337 as a preamble to the use of the guidance on itinerant workers. That was in point, because it was referred to in the employer's evidence.

    26. V – CP/3017/2004

  26. This is a decision of Mr Commissioner Mesher, which was added to the papers by Mr Commissioner Pacey. It concerned the calculation of earnings in connection with an increase of retirement pension. This was determined under the Social Security (Computation of Earnings) Regulations 1996. The relevant provision is equivalent to regulation 35. The claimant's wife worked in promotions for various manufacturers at supermarkets and was paid expenses for all her travel, both between home and a supermarket or between supermarkets. She received instructions from her employer each week by telephone and post. On the facts of that case, Mr Mesher treated the claimant's home as her place of employment, with the result that the expenses paid to her for travel from home did not count as earnings.

  27. I have taken a slightly different approach by finding that the claimant in this case had no place of employment. I could just as easily have found that her place of employment was her home. However, on the facts of this case I consider that my approach is the more realistic.

    28. G. What the claimant said at the hearing
  28. The claimant was able to provide a little more detail about her manner of working than appeared from the papers. However, everything she said was consistent with the written evidence and the tribunal's findings.

  29. On the key issue of her place of employment, she emphasised that she was not office based and was paid from the moment she left her home.

    30. H. Disposal
  30. The tribunal did not go wrong in law. I dismiss the appeal.

    31. Signed on original
    on 21 October 2008    		 Edward Jacobs
    Commissioner

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