HMRC v AV & Anor

Where rival parents claim child benefit, entitlement must be determined through the statutory scheme. If both parents satisfy the test in section 143(1)(a) of the Social Security Contributions and Benefits Act 1992, the question is one of priority under section 144 and Schedule 10.

A court order or agreement for shared care is relevant evidence of where a child lives, but it is not decisive. The question is factual and must be determined from all relevant circumstances; the majority of time spent with one parent is not determinative. Where none of paragraphs 1 to 4 of Schedule 10 applies, HMRC must determine entitlement under paragraph 5. That determination falls outside the tribunal’s jurisdiction.

HMRC appealed against a decision of the First-tier Tribunal dated 12 October 2022, which had allowed the first respondent’s appeal and awarded her child benefit for two children. The First-tier Tribunal had not joined the children’s father, although its decision necessarily affected his entitlement. It also treated the children’s welfare and the practical benefit of payment to the mother as relevant to the decision.

The Upper Tribunal had to determine whether the First-tier Tribunal’s failure to join the father was unfair, whether it had applied the correct statutory priority rules, where the children lived for the purposes of section 143(1)(a), and whether the Upper Tribunal should remit or remake the decision.

1. Appeal allowed. The First-tier Tribunal’s decision was set aside for error of law and the Upper Tribunal remade the decision.
2. The father had an obvious interest in the outcome because the First-tier Tribunal’s decision that the mother was entitled necessarily meant that he was not. Failing to join him deprived him of the opportunity to make representations and was a breach of natural justice. The Upper Tribunal therefore added him as a party and directed disclosure of the appeal papers, subject only to a limited redaction.
3. Both parents were capable of being responsible for the children under section 143. Section 144 required priority to be determined under Schedule 10. The First-tier Tribunal had instead considered the children’s welfare and the practical benefit of payment to the mother. Those considerations were irrelevant to paragraphs 1 to 4. Although they might be relevant to HMRC’s discretion under paragraph 5, the tribunal had no jurisdiction to determine entitlement under that paragraph.
4. The question whether a child is living with a person under section 143(1)(a) is one of fact, determined on all relevant evidence. It is not decided by the parent with whom the child spends most time. A court order or parental agreement concerning shared care is relevant, but not conclusive. Regular stays, the children’s possessions, care arrangements, and the parties’ intentions may all be relevant.
5. On the evidence, including the shared-care order, the regular stays with the mother, and the continuing pattern of arrangements, the children lived with both parents. Section 143(2) did not alter that conclusion. None of paragraphs 1 to 4 of Schedule 10 applied. In the absence of a joint election, HMRC was required to determine entitlement under paragraph 5, and the matter was referred to HMRC.

• Upper Tribunal (Administrative Appeals Chamber): appeal from the First-tier Tribunal decision dated 12 October 2022 allowed; decision set aside and remade under section 12 of the Tribunals, Courts and Enforcement Act 2007.
• First-tier Tribunal (Social Entitlement Chamber): appeal by AV allowed and entitlement to child benefit awarded to her.