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Judicial Summary

Child support 鈥� assessment of income 鈥� treatment of expenses received from employer

In 2014 the mother, the parent with care, applied for child support maintenance to the Child Maintenance Service (CMS) which initially assessed the father鈥檚 liability as 拢133.11 a week and later, following a review, as 拢207.34. The father appealed to the First-tier Tribunal (F-tT), arguing that the CMS had wrongly assessed his liability on review by using his income for 2013/14 (not 2014/15) and by failing to deduct expenses he incurred during the course of his employment. The F-tT rejected his appeal, holding that the CMS had been bound to use the figures provided by Her Majesty鈥檚 Revenue and Customs (HMRC). The Secretary of State eventually supported the appeal but the judge decided to set out his reasoning, as the failure to take properly into account work-related expenses may also be a problem for other non-resident parents.

Held, allowing the appeal, that:

1. HMRC had details of the father鈥檚 income for 2014/15, the latest available tax year, when it received CMS鈥檚 request and should have provided that information (not the 2013/14 figures) and the F-tT had not been 鈥渂ound鈥� to accept the figures erroneously supplied by HMRC: SB v Secretary of State for Work and Pensions (CSM) [2016] UKUT 84 (AAC) followed (paragraph 16);

2. where a person received a sum of money on account of expenses which could be drawn on as they arose then this would be income charged to tax within the meaning of regulation 36, and the figure the CMS would use to calculate maintenance would include this sum. However, the father had incurred expenses for which he had been reimbursed, and therefore had not actually received any income or any sort of benefit in kind, and in these situations the expenses would not be 鈥渋ncome on which the non-resident parent was charged to tax鈥� within regulation 36. This construction was consistent with the policy intention of the legislation and the principles established in previous case law: Owen v Pook (Inspector of Taxes) [1970] AC 244 (paragraphs 29, 32, 34 and 40).

The judge set aside the decision of the F-tT and re-made the decision, upholding the father鈥檚 appeal and remitting the case to the Secretary of State so that a fresh determination could be made in accordance with his directions.