Gray v Secretary of State for Work and Pensions & Anor

Gray v Secretary of State for Work and Pensions & Anor

The decision maker is entitled to rely on their own evaluation of the parent's actual profits from self-employment for child support purposes, rather than being bound by the figures submitted to HMRC. Where the decision maker finds profits above those accepted by HMRC, the deduction for income tax and national insurance must be calculated on the actual profits found.

Parties
Appellant: Trevor Gray; 1st Respondent: Secretary of State for Work and Pensions; 2nd Respondent: Ms Lisa James
Jurisdiction
England and Wales
Judgment Date
05 November 2012
Procedural Posture
Civil Appeal / Appeal From Upper Tribunal to Court of Appeal
Outcome
Appeal dismissed on main ground; allowed in part on calculation of tax deduction; case remitted for recalculation.
Legal Topics
Child Support Assessment, Self Employment Income Calculation, Statutory Interpretation
Family Law Social Security Law Child Support Assessment Self Employment Income Calculation Statutory Interpretation

Case Brief

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Parties

Trevor Gray

Appellant

Secretary of State for Work and Pensions

1st Respondent

Ms Lisa James

2nd Respondent

Procedural Posture

Civil Appeal / Appeal From Upper Tribunal to Court of Appeal

Legal Issues

  1. 1 Whether the decision maker is bound to accept the self-employed parent's income as declared to HMRC for child support purposes or may make their own findings of actual profits.
  2. 2 How income tax and national insurance deductions should be calculated when the decision maker finds profits different from HMRC's assessment.

Ratio Decidendi

The decision maker is entitled to rely on their own evaluation of the parent's actual profits from self-employment for child support purposes, rather than being bound by the figures submitted to HMRC. Where the decision maker finds profits above those accepted by HMRC, the deduction for income tax and national insurance must be calculated on the actual profits found.

Court Disposition

Appeal dismissed on main ground; allowed in part on calculation of tax deduction; case remitted for recalculation.

Orders

  • Remit to Secretary of State for recalculation of child support assessment to allow deduction of income tax and national insurance on the notional surplus between the earnings found by the First Tier Tribunal and those accepted by HMRC.