Eyeson v Milton Keynes Council

Where a change in tax credit affects entitlement to Housing Benefit, the notification offence under section 112(1A) of the Social Security Administration Act 1992 is not excluded by paragraph 13 of Schedule 2 to the Tax Credits Act 1999. The relevant failure to notify concerns the affected Housing Benefit entitlement, not entitlement to tax credit itself.

For limitation purposes, the three-month period begins when sufficient evidence to justify prosecution comes to the appropriate authority’s knowledge. The authority cannot rely on a statutory certificate that was not placed before the magistrates. A general explanation for delay, including awaiting an interview or considering the public interest, does not satisfy the statutory test.

The claimant was convicted by Milton Keynes Magistrates’ Court on two informations alleging failures to notify increases in Working Families’ Tax Credit affecting her Housing Benefit and Council Tax Benefit. The offences were charged under section 112(1A) of the Social Security Administration Act 1992.

On a case stated, the claimant challenged the convictions on three grounds. She argued that paragraph 13 of Schedule 2 to the Tax Credits Act 1999 excluded the prosecutions, that the informations were laid out of time under section 116(2)(b) of the 1992 Act, and that there was insufficient evidence. The central issues were the scope of the statutory exclusion and the date on which sufficient evidence came to the authority’s knowledge.

1. The appeal was allowed and the convictions and sentence were quashed. The court answered the first question in the affirmative and the second in the negative. It was unnecessary to determine the sufficiency-of-evidence challenge.

2. Paragraph 13 of Schedule 2 to the Tax Credits Act 1999 did not exclude the operation of section 112(1A) of the Social Security Administration Act 1992. The benefit referred to in paragraph 13 was the benefit identified in section 112(1A)(a). Here that benefit was Housing Benefit, not tax credit. Although the change of circumstances consisted of an increase in tax credit, the notification obligation related to the resulting effect on Housing Benefit entitlement.

3. That construction was supported by the statutory scheme. The Tax Credits Act 1999 placed tax-credit administration with the Commissioners of Inland Revenue and provided its own penalty regime under section 9(1). Paragraph 13 was intended to avoid duplication, not to create a gap in enforcement where tax credit affected entitlement to Housing Benefit.

4. Under section 116(2)(b), proceedings had to be brought within three months of the date on which sufficient evidence, in the opinion of the appropriate authority, came to its knowledge, or within twelve months of commission of the offence, whichever expired later. The magistrates had found that all documentary evidence sufficient to justify prosecution was available by 10 February 2003. Their conclusion that the delay was satisfactorily explained was not the statutory test.

5. The Council could not rely on the certificate contemplated by section 116(3)(b), because it had not been produced before the magistrates and was not evidence before them. Unanswered interview requests could not extend the limitation period without evidence that the authority considered the existing evidence insufficient to justify prosecution. A possible desire to assess the public interest was irrelevant to the statutory sufficiency-of-evidence test.

Lord Justice Maurice Kay agreed with Mr Justice Moses. The appeal was allowed, and the conviction and sentence were quashed.

• High Court (Administrative Court): On a case stated from the magistrates’ decision of 29 April 2004, the appeal was allowed; the convictions and sentence were quashed.
• Milton Keynes Magistrates’ Court: The claimant was convicted on two informations and sentenced.