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Neutral Citation Number:	2014 UKUT 142 AAC
Reported Number:
File Number:	CCS 2934 2011
Appellant:	DA
Respondent:	Secretary of State for Work and Pensions (CSM)
Judge/Commissioner:	Judge M. Rowland
Date Of Decision:	25/03/2014
Date Added:	29/04/2014
Main Category:	Child support
Main Subcategory:	applications
Secondary Category:
Secondary Subcategory:
Notes:	Reported as [2014] AACR 36. Child support maintenance – whether unpaid tax and national insurance contributions to be deducted from employed earner’s earnings – whether earnings from employment or self-employment The mother, the resident parent, appealed to the First-tier Tribunal (F-tT) against a child support maintenance assessment on the ground that the father effectively still ran a company of which he was a former shareholder and received from it an income in addition to the part-time salary he had disclosed. The F-tT decided on the basis of the bank statements that the father had an additional annual income from the company of £26,520 and that a variation under regulation 19 of the Child Support (Variations) Regulations 2000 was appropriate, just and equitable. The father appealed to the Upper Tribunal (UT) on the ground, inter alia, that the additional sums he had received should have been treated as capital. The UT raised the further questions whether the additional income should have been included within the basic maintenance calculation rather than as a variation and whether, in the light of Gray v Secretary of State for Work and Pensions [2012] EWCA Civ 1412; [2013] AACR 5, deductions for tax and National Insurance contributions should have been made under Schedule 1 to the Child Support (Maintenance Calculations and Special Cases) Regulations 2000 if the earnings were from employment as an employed earner. Held, allowing the appeal in part, that: 1. the F-tT had been entitled to find that the additional sums amounting to £26,520 that the father had received had been payments in respect of employment and were income (paragraph 13); 2. the F-tT had erred in making a variation, rather than taking the additional earnings into account in the basic calculation, because none of the grounds for a variation had been made out (paragraph 16); 3. the Court of Appeal’s decision in Gray, which related to earnings from self-employment, did not automatically lead to the conclusion that tax and National Insurance contributions must be deducted from an estimated sum of employed earner’s earnings; rather it must first be considered whether the estimate is of earnings gross or net of tax and, moreover, a lack of deductions at source might suggest that payments were not being made as employed earner’s earnings at all (paragraphs 24 to 27); 4. in the present case, the making of additional payments of £26,520 to the father without the deduction of tax and National Insurance contributions appeared more consistent with him having been employed as an independent contractor rather than as an employee, albeit that he was simultaneously also a part-time employee (paragraph 31). The judge set aside the F-tT’s decision and re-made it, taking account of the £26,520 as receipts from self-employment but deducting tax and National Insurance contributions.
Decision(s) to Download:	[2014] AACR 36bv.doc