A CTC retro-fix for refugees – who stands to benefit?
Recent court cases have confirmed that newly recognised refugees are, depending on when they claimed asylum, still able to make claims for retrospective child tax credits (CTC) following the roll-out of universal credit (UC). Claire Hall takes stock on who can benefit.
DK and Adnan
The Court of Appeal (in DK) and the Inner House of the Court of Session in Scotland (in Adnan and Adnan) have confirmed that, under existing legislation, newly recognised refugees with children who claimed asylum prior to UC being rolled out in their area, can claim retrospective CTC from the date of their asylum claim.1R (on the application of DK) v The Commissioners for Her Majesty’s Revenue and Customs and Secretary of State for Work and Pensions (Interested Party) [2022] EWCA Civ 120; HMRC v Adnan and Adnan [2022] CSIH 2 A summary of both cases can be found on page 10 of this issue. (The issues originally before the High Court judicial review case in DK – a CPAG case – were discussed in Bulletin 277 (p5), and the subsequent High Court decisions described in Bulletin 283 (p12)).
Who can benefit?
Those who have had their refugee status recently recognised who claimed asylum prior to UC being rolled out in their area can make a claim for retrospective CTC. This is because a claim made under the Tax Credits (Immigration) Regulations 2003 is treated as having been made on the date that the claimant claimed asylum, and every 6 April since.2Reg 6, The Tax Credits (Immigration) Regulations 2003 No.653 In order for the claim not to be barred by Article 7(1) of the Welfare Reform Act 2012 (Commencement No.23 and Transitional and Transitory Provisions) Order 2015, this ‘deemed date’ of claim must therefore fall before UC was rolled out in her/his postcode area, as set out in the various commencement orders.
A claim must be made within one month of when the claimant (or her/his solicitor) receives notification that s/he has been recorded by the Secretary of State for the Home Department as a refugee – ie, that her/his leave has been granted.3Reg 3(5) The Tax Credits (Immigration) Regulations 2003 No.653 The one-month window to claim runs from receipt of notification, not the date the Home Office communication is sent, and claimants should not wait for receipt of their biometric residence permits (BRP) from the Home Office before claiming (unless receipt of their BRP is the first notification of their grant of leave that they receive).
In some cases, a claimant may have made one or more fresh claims for asylum following refusal and exhaustion of appeal rights of her/his initial claim, and the question will therefore arise as to whether it should be her/his first asylum claim that is treated as the ‘deemed date’ of the CTC claim, or the date of a later asylum claim. In FK v HMRC [2009] UKUT 134 (AAC), it was recognised that under the Convention relating to the Status of Refugees 1951 (the Geneva Convention), a person is a refugee from the moment that the conditions set out in international law are satisfied. As such, if a refugee was ultimately successful in establishing her/his status in a later asylum claim after presenting new evidence, the relevant ‘deemed date’ for her/his CTC claim is nonetheless the date of her/his first asylum claim, so long as her/his refugee status does not arise as a result of events that occurred after the initial claim for asylum.
Calculating retrospective CTC entitlement
Once the deemed date of the CTC has been established, it should be possible to work out the total maximum CTC entitlement using the rates for the relevant tax years, or part of tax years, which are being claimed for. The end date for the CTC entitlement period can be established in the usual way – for example, if the refugee’s child turned 18 and then left full-time education, as was the case with DK, that would be the final day of entitlement. If the refugee otherwise remained entitled to CTC but has since claimed UC, that step will also operate to end the period of CTC entitlement so that there will be no overlapping period. Once the total maximum CTC entitlement is established, it is necessary to deduct any asylum support payments received by the claimant under section 95 and section 98 of the Immigration and Asylum Act 1999 during the relevant tax years, to give the amount of CTC which will be payable.4Reg 3(9) The Tax Credits (Immigration) Regulations 2003 No.653 Payments made under section 4 of the Immigration and Asylum Act 1999 and integration loans under section 13 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004, on the other hand, do not reduce the amount of CTC that is payable.
How can newly recognised refugees claim?
The good news for those looking to claim retrospective CTC now is that there is no further appeal by HM Revenue and Customs (HMRC) pending and these judgments will now be implemented. At the time of writing, HMRC has indicated that it is in the process of amending the necessary guidance and making the operational changes needed to accept and process CTC claims from newly recognised refugees. In the meantime, those wishing to claim should not delay contacting HMRC by telephone stating ‘please treat this telephone call as a claim for tax credits’. Until the operational changes are fully implemented (expected sometime after Easter 2022), HMRC has indicated that the process which was put in place following the July 2021 DK High Court judgment continues as follows.
    HMRC call handlers should check whether the claimant has been granted refugee status and, if s/he has, check when s/he received notification from the Home Office that her/his status had been recorded.
    Where the call is made within a month of notification of her/his status, HMRC should record the details of the claimant and inform her/him that s/he will be contacted in due course.
It is prudent to follow this call up with a completed claim form (from a previous year if it is not possible to obtain a current form) under a cover letter referring to the judgments with confirmation that your client has claimed CTC by telephone and you are now providing the information needed to enable HMRC to calculate entitlement. This must arrive with HMRC within one month of notification of refugee status. Further resources for advisers and CPAG contact details for second-tier advice are available at: cpag.org.uk/welfare-rights/resources/test-case/retrospective-child-tax-credits-newly-recognised-refugees. Updates on HMRC’s implementation of the judgments will also be added to this webpage in due course.
What about those who have missed out?
A key question which remains is what redress – if any – will be available for those who were unable to access their CTC entitlement because they either:
    didn’t attempt to claim within one month of their notification of refugee status during the period HMRC misapplied the law, due to HMRC guidance incorrectly stating that they were unable to claim; or
    attempted to claim within the deadline but their claim was incorrectly rejected and they did not receive a decision carrying statutory appeal rights.
HMRC has not yet confirmed a mechanism by which those who missed out on entitlement can redress the position – eg, by way of extra-statutory payment.
In the meantime, the latter group could request late decisions on their claims, providing any evidence they may have that they contacted HMRC within one month of their leave notification.
For the former group, things are more complicated. An argument could be made that an extension to the one-month deadline should be read into the legislation on human rights grounds so that they can now claim. However, this may need to be considered by the Upper Tribunal. A further complication arises in that, if this group attempts to make claims now, which HMRC refuses to accept, rather than issuing section 14 decisions under the Tax Credits Act 2002 saying they are not entitled to CTC, there is also a question of whether the tribunals even have jurisdiction to consider appeals of these refusal decisions. If they didn’t, it would have the consequence that judicial review would be the only available route of challenge against these refusals. For the meantime, it remains at least arguable that the tribunal does have jurisdiction to consider these issues, and it is hoped that the Upper Tribunal will clarify this point in the near future.
1     R (on the application of DK) v The Commissioners for Her Majesty’s Revenue and Customs and Secretary of State for Work and Pensions (Interested Party) [2022] EWCA Civ 120; HMRC v Adnan and Adnan [2022] CSIH 2 »
2     Reg 6, The Tax Credits (Immigration) Regulations 2003 No.653 »
3     Reg 3(5) The Tax Credits (Immigration) Regulations 2003 No.653 »
4     Reg 3(9) The Tax Credits (Immigration) Regulations 2003 No.653 »