DK (R on the application of) v The Commissioners for HMRC

The Court of Appeal considered whether article 7 of the Welfare Reform Act 2012 (Commencement No. 23 and Transitional and Transitory Provisions) Order 2015 prevents a refugee being treated as having made a tax credit claim on the earlier dates specified in regulation 3(6) of the Tax Credits (Immigration) Regulations 2003. The 2003 Regulations, made under section 42 of the Tax Credits Act 2002, provide that a person recorded as a refugee who claims tax credit within one month of notification is to be treated as having claimed on the date of the asylum claim and on each 6 April intervening, and that claims be determined as if recorded as a refugee on the asylum claim date. Article 7 of the 2015 Order provides that, in areas where Universal Credit is in force, a tax credit claim is made on the date on which action is taken which requires a decision and thus prohibits making tax credit claims on dates where Universal Credit would have applied.

The Court held that the provisions "mesh": the deemed claim dates in regulation 3(6) are effective for refugees recognised on a later date, and article 7(1) should be read as referring to those deemed dates. The Court followed the Inner House decision in HMRC v Adnan (2022) CSIH 2 and dismissed the appeal. The Court also observed the established practice of following Scottish appellate authority on revenue matters unless there is a compelling reason not to do so.

This was an appeal against Bourne J's decision in the Administrative Court (R (DK) v HMRC [2021] EWHC 1845 (Admin)), which quashed HMRC's refusal to allow the respondent a backdated award of child tax credit. The respondent was an asylum seeker who had claimed asylum before becoming recorded as a refugee; the claim for tax credits (and a request for backdating) was submitted after asylum was granted and after Universal Credit had been rolled out in the respondent's area. The respondent relied on regulation 3(5)-(8) of the Tax Credits (Immigration) Regulations 2003, made under section 42 of the Tax Credits Act 2002, which contains a deeming provision that treats a refugee as having claimed on the date of the asylum claim and on every 6 April in intervening years.

Nature of the application: judicial review of HMRC's decision refusing a backdated child tax credit award; relief sought was quashing of HMRC's refusal and recognition of entitlement for the period predating the date on which a physical claim was made to HMRC.

Issues framed:

• Whether article 7 of the 2015 Order prevents a tax credit claim being treated as made on the dates provided by regulation 3(6) of the 2003 Regulations when Universal Credit was in place in the area.
• (Other grounds raised below of ECHR and equality duty were rejected by the High Court and not the subject of this appeal.)

Court's reasoning: the Court of Appeal accepted the reasoning of the Inner House in HMRC v Adnan (2022 CSIH 2) that the two instruments should be construed to "mesh". The deeming in regulation 3(6) gives effect to the recognition, on grant of asylum, that the person was a refugee through the relevant earlier period; article 7(1)'s reference to "that date" should be read as including the deemed dates provided by regulation 3(6). The Court emphasised the desirability of avoiding conflicting decisions between Scottish and English appellate courts in revenue matters and saw no compelling reason to depart from the Inner House. An application to adduce a Department for Work and Pensions witness statement was allowed in part (only objective background matters), but the Court said nothing in that statement would have changed the result. The appeal was dismissed and Bourne J's quashing order was effectively upheld.

The appeal is dismissed. The Court held that article 7 of the 2015 Order does not prevent a person to whom regulation 3(5) of the 2003 Regulations applies being treated as having claimed tax credits on the dates provided by regulation 3(6). The deemed claim dates and the commencement order are to be read so as to "mesh", giving effect to the deeming provision for a recognised refugee whose asylum claim was earlier than the date of recognition.

Appeal from the Administrative Court (Mr Justice Bourne) [2021] EWHC 1845 (Admin), in which the High Court quashed HMRC's decision refusing a backdated award of child tax credit. The Court of Appeal heard the appeal and dismissed it. The Court considered and followed the Inner House of the Court of Session in HMRC v Adnan [2022] CSIH 2 (having noted the earlier Outer House decision Adnan [2021] CSOH 63).