PETITION OF ALI ADNAN AND MRS SAIMA ADNAN FOR JUDICIAL REVIEW

Factual and Procedural Background

The petitioners, a married couple, applied for asylum in the United Kingdom on 14 February 2013. Their initial asylum application was refused, and their appeal rights were exhausted by 17 August 2015. They subsequently made further submissions accepted as a fresh claim on 20 January 2018, and were granted refugee status on 4 October 2019. Formal notification of their refugee status was received in December 2019, after which they successfully claimed Universal Credit on 23 December 2019. On 14 January 2020, the petitioners made a claim for child tax credit backdated to their original asylum application date. HM Revenue and Customs (HMRC) refused to accept this claim by decisions dated 27 March and 18 September 2020. The petitioners sought judicial review of these refusals, contending that the decisions were ultra vires, unlawful, and irrational. The matter was heard in the Outer House of the Court of Session in a substantive debate.

Legal Issues Presented

1. Whether article 7 of the Welfare Reform Act 2012 (Commencement No 23 and Transitional and Transitory Provisions) Order 2015 (the "Commencement No 23 Order") disentitles the petitioners from claiming child tax credits for the period from their initial asylum claim until the replacement of tax credits by Universal Credit on 1 February 2019.

Arguments of the Parties

Petitioners' Arguments

• The petitioners argued that their entitlement to child tax credits under regulation 3 of the Tax Credits (Immigration) Regulations 2003 ("the 2003 Regulations") was preserved by article 3 of the Welfare Reform Act 2012 (Commencement No 32 and Savings and Transitional Provisions) Order 2019 ("the Commencement No 32 Order").
• They contended that article 7 of the Commencement No 23 Order, a transitional provision, did not apply to asylum seekers governed by the 2003 Regulations, but only to "ordinary" tax credit claimants.
• Article 7(8)(a) of the Commencement No 23 Order, defining the date a claim is made, should be read subject to regulation 3(6) of the 2003 Regulations, which treats the claim as made on the date of the asylum application.
• They submitted that article 7(8)(b), clarifying backdating provisions, did not apply to them as it referred to the 2002 Regulations, which were disapplied by the 2003 Regulations for asylum seekers.
• The petitioners relied on a presumption against repeal of rights under section 16 of the Interpretation Act 1978, arguing that Parliament did not intend to remove their right to backdated child tax credits without express provision.
• They referenced authoritative statutory interpretation principles and recent case law supporting their position.

HMRC's Arguments

• HMRC argued that article 7 of the Commencement No 23 Order was determinative, preventing claimants who could claim Universal Credit from making claims for legacy benefits including child tax credits.
• They asserted that the petitioners’ entitlement depended on making a claim within one month of being notified as refugees under regulation 3(5)(b) of the 2003 Regulations, which was precluded by article 7(1) of the Commencement No 23 Order.
• HMRC contended that the deeming provision in regulation 3(6) could only apply if an actual timely claim was made under regulation 3(5)(b), and could not override the prohibition on making claims in article 7(1).
• They maintained that article 7(8)(a) defines the claim date as the date an action necessitating a decision under the 2002 Regulations is taken, and that certain requirements of the 2002 Regulations, including regulation 5, remain applicable to asylum seekers.
• HMRC argued that the replacement of tax credits by Universal Credit necessarily removed the ability to make backdated claims for tax credits and that this was a rational legislative consequence.
• They rejected the petitioners’ reliance on the Interpretation Act 1978, asserting no prior right to claim tax credits existed at the time of the Commencement No 23 Order enactment.

Table of Precedents Cited

Court's Reasoning and Analysis

The court focused on the interpretation of article 7(1) and (8) of the Commencement No 23 Order in relation to regulation 3(5) and (6) of the 2003 Regulations. The central question was whether article 7 entirely excluded the possibility of making a claim under regulation 3(5)(b), to which the backdating in regulation 3(6) applies.

The court found no express exclusion in article 7 and rejected HMRC’s distinction between entitlement to tax credits and the ability to make a claim. The court reasoned that the deeming provision in regulation 3(6), which treats the claim as made on the date of the asylum application, was not overridden by article 7.

The court noted the puzzling wording of article 7(8)(a) but interpreted it as referring to the making of a claim meeting the formal requirements in the 2002 Regulations, which includes regulation 5. It concluded that the petitioners' claim was made on 14 January 2020, the date of their claim for child tax credits.

The court held that regulation 3(5) establishes conditions that, once met, activate the deeming provision in regulation 3(6), rather than constituting a barrier to its operation. The court rejected HMRC’s circular argument that a timely claim under regulation 3(5)(b) was a prerequisite to the deeming in regulation 3(6).

Further, the court found significance in Parliament’s explicit exclusion of the backdating provision in regulation 7 of the 2002 Regulations in article 7(8)(b) of the Commencement No 23 Order, while making no mention of regulation 3(6) of the 2003 Regulations. This indicated Parliament did not intend to alter the special rules for asylum seekers.

The court also found the petitioners’ reliance on section 16 of the Interpretation Act 1978 less critical, as the court had determined no statutory provision removed their entitlement.

Holding and Implications

The court sustained the petitioners' pleas in law and granted the orders sought, reducing the HMRC decisions and declaring them unlawful. It rejected the respondents' pleas.

The direct effect is that the petitioners are entitled to have their claim for child tax credits reconsidered by HMRC, with the benefit of the court’s interpretation. The court noted it could not at this stage hold the petitioners entitled to receive child tax credits from the original asylum claim date in 2013, as that claim was unsuccessful. HMRC is to consider whether any entitlement arises from the fresh claim made in January 2018.

No new precedent was established beyond the interpretation of the relevant transitional provisions and regulations as applied to the petitioners’ circumstances.