Her Majesty's Revenue and Customs v Carrington

Factual and Procedural Background

The case concerns an appeal by the Commissioners for Her Majesty's Revenue and Customs ("HMRC") seeking to raise new points of law regarding articles 7 and 10 of Regulation (EC) 883/2004 ("the 2004 Regulation"). These points were not raised in the Tribunals below. The appellant, referred to as Mrs Carrington, lived in the UK and received child benefit under the Social Security Contributions and Benefits Act 1992 and the Child Benefit (General) Regulations 2006. In August 2011, Mrs Carrington and her family moved permanently to Spain. While the Department for Work and Pensions ("DWP") was notified of the move regarding Disability Living Allowance ("DLA"), HMRC was not separately notified. Upon discovering the move, HMRC decided that child benefit had been overpaid from September 2011 to May 2013 and ceased payments, demanding repayment of £1,766.10.

Mrs Carrington appealed this decision to the First-tier Tribunal (Social Entitlement Chamber) ("FTT (SEC)"), which dismissed her appeal by a non-oral decision in July 2014. The FTT found that as Mrs Carrington was no longer ordinarily resident in the UK, child benefit should not have been paid, and that EU law did not assist her. She then appealed to the Upper Tribunal (Administrative Appeals Chamber), which stayed the appeal pending a related Court of Justice of the European Union ("CJEU") decision, ultimately finding that the related article was not relevant.

In submissions to the Upper Tribunal, HMRC argued that article 7 of the 2004 Regulation applied to prevent withdrawal of benefits solely because the beneficiary resided in another member state, but also relied on article 68 of the 2004 Regulation and article 59 of Regulation (EC) 987/2009 ("the 2009 Regulation") to argue no obligation to pay after the move. The Upper Tribunal, however, held that article 7 applied, article 68 did not due to lack of overlapping claims, and article 59 did not apply as it would override article 7 improperly.

Separate proceedings concerning DLA concluded that the UK remained the competent state for DLA payments, which continued. HMRC sought permission to raise new points of law on appeal concerning articles 7 and 10 of the 2004 Regulation, which was granted by the Court of Appeal. Mrs Carrington, acting in person, expressed concerns about representation and costs, which HMRC addressed by agreeing not to seek costs or repayment and to continue payments regardless of the appeal's outcome.

Legal Issues Presented

1. Whether the Upper Tribunal erred in deciding that article 7 of the 2004 Regulation required the UK to continue paying child benefit after the appellant's move to Spain, or that article 7 meant the applicable legislation did not change.
2. Whether article 68 of the 2004 Regulation applied to this case.
3. Whether article 10 of the 2004 Regulation applied to the appellant's case.
4. Whether the 2004 Regulation remains relevant and applicable following the UK's departure from the European Union.
5. Whether sufficient findings of fact exist to allow the court to decide the new points of law without unfairness.
6. Whether adequate representation of the opposing case will be ensured, given the appellant's self-representation and HMRC's raising of new points of law.

Arguments of the Parties

Appellant's Arguments

• The UK remained the competent state to pay child benefit despite the move to Spain.
• Requested payment of arrears of child benefit up until 2018, when her child left approved secondary education.
• Relied on the Upper Tribunal's judgment supporting the position that the UK should continue payment.
• Expressed concerns about representation and potential costs in the appeal process.

HMRC's Arguments

• Sought permission to raise new points of law regarding articles 7 and 10 of the 2004 Regulation, which were not raised previously.
• Argued that article 7 did not require continued payment of child benefit after the appellant moved to Spain.
• Contended that article 68 of the 2004 Regulation and article 59 of the 2009 Regulation applied to limit payment obligations.
• Confirmed they would not seek costs or repayment from the appellant and would continue payments regardless of the appeal outcome, to protect the appellant's position.
• Suggested appointment of an advocate to the court to ensure proper representation of the opposing case given the appellant's self-representation.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court exercised its discretion under section 14 of the Tribunals, Courts and Enforcement Act 2007 to permit HMRC to raise new points of law not previously argued. The court considered five key issues: the effect of granting permission on the appellant, the continuing relevance of the 2004 Regulation post-Brexit, sufficiency of factual findings, potential decisiveness of the new points of law, and adequacy of representation of the opposing case.

The court found that HMRC had protected the appellant's position by agreeing not to seek costs or repayment and to continue benefit payments, ensuring no unfair prejudice. The 2004 Regulation remained relevant due to transitional provisions in the Withdrawal Agreement, thus the points of law were important for this and future cases.

Factual findings by the First-tier Tribunal that the appellant moved permanently to Spain were sufficient to allow the court to consider the new points of law without requiring new factual determinations. The court acknowledged the significance of the legal questions concerning the exportability of child benefit and the distinction between different types of benefits under EU law, which warranted full argument on appeal.

Given the appellant's self-representation, the court agreed with HMRC's suggestion to appoint an advocate to the court to ensure proper representation of the opposing arguments, promoting a fair and thorough consideration of the issues.

Holding and Implications

The Court GRANTED PERMISSION to HMRC to raise the new points of law concerning articles 7 and 10 of the 2004 Regulation on appeal. The appellant's position was protected to prevent unfairness, and sufficient factual findings existed to allow the appeal to proceed effectively.

The appeal was adjourned to enable the appointment of an advocate to the court to assist with argumentation, and further directions were made to ensure the effectiveness of the adjourned hearing. While the decision does not set new precedent, it clarifies that important points of principle regarding the exportability of child benefit under EU law remain relevant post-Brexit and merit detailed judicial examination.