Reply To: Caselaw re being bound to a misrepresentation of finances

Peter Barker

It was CTC/626/01, cited in CH/2387/2002:

In the HB case (actually a CTB case) the claimant and his wife were company directors who didn’t draw their full salary but instead left it to pile up in their directors’ loan accounts. This was because the company couldn’t afford to pay the salaries in full, but there were still tax advantages from doing this and the money might one day become available if the company started doing better. They Commissioner says they cannot spin one yarn to the taxman and another to HB.

In the Tax Credit case, the couple were self-employed partners. All the income was allocated to the wife and most of the working hours were allocated to the husband, which reduced the tax they paid between them (presumably because he had other taxable income and she did not) but it meant that neither of them satisfied the eligibility criteria for WFTC – remunerative work for at least 16 hours a week.

I think the CTB case, at para 12, is better and clearer authority for the proposition that you cannot change your story for benefit purposes from what you have already told the taxman.