The decision

Upper Tribunal
(Immigration and Asylum Chamber)

GS (public funds – tax credits) India [2010] UKUT 419 (IAC)


Decided at: Field House Determination promulgated
On: 6 October 2010

Senior Immigration Judge McKee



Entry Clearance Officer, New Delhi

Paragraph 6C of the Immigration Rules specifies that an applicant for entry clearance whose arrival would cause an increase in the tax credits which his sponsor is already receiving will (in contrast to in-country applicants under paragraph 6B) be regarded as having recourse to public funds. But where the applicant will be joining a spouse or partner who is both working and bringing up children, the amount of working tax credit payable will actually be reduced. That is because the sponsor will lose the lone parent supplement which forms part of the working tax credit.


1. On 10 March 2010 the appellant’s application for entry clearance as a spouse was refused on the sole ground that he did not satisfy the requirement of paragraph 281(v) of the Immigration Rules for adequate maintenance to be available without (additional) recourse to public funds. His wife lives in Dudley with her two children from a previous marriage and has a low-paid job, the income from which is supplemented by working tax credit and child tax credit. On appeal, Immigration Judge Mathews found that the sponsor’s weekly income from all sources of £575 was well above the £361 which a ‘comparator’ family of two adults and two children would receive on Income Support, but he dismissed the appeal because of two things which he thought might go up if the appellant were to join the sponsor’s household. The first was the rent, the second was the amount of tax credit which would be payable.

2. The first of these was not mentioned by the ECO and was not raised at the hearing. I granted leave to appeal to the Upper Tribunal because the judge had not informed the parties that this matter was troubling him, and given them an opportunity to address it. That seemed a clear error of law. As it turns out, on subsequent inquiry being made, Jephson Housing Association have provided a letter dated 9 August 2010 confirming that, if another adult were to move into the sponsor’s house, the rent would not go up.

3. That leaves the question of tax credits. Nothing has been received from the respondent since the grant of permission to appeal, so when I issued a combined ‘Decision & Directions’ on 14 September, I set aside IJ Mathews’ decision for legal error, and requested from the parties written submissions and documentary evidence on how the appellant’s arrival would affect the position vis-à-vis tax credits. I would then proceed to re-make the decision without a hearing.

4. Only one side has responded. Mr Khera of Sehgal & Co. has helpfully provided written submissions and two further documents: a Home Office leaflet, giving guidance to the public on what it means to have ‘no recourse to public funds’, and a copy of the Tax Credits (Immigration) Regulations 2003, made under section 42 of the Tax Credits Act 2002. The latter sets out a general rule at reg 3(1), “No person is entitled to child tax credit or working tax credit while he is a person subject to immigration control.” But there are a number of exceptions, including reg 3(2):

“(2) Where one member of a married couple or unmarried couple is a person subject to immigration control, and the other member is not …

(a) the calculation of the amount of tax credit under the Act, the Child Tax Credit Regulations and the Working Tax Credit Regulations …,
(b) the method of making (or proceeding with) a joint claim by the couple, and
(c) the method of payment of the tax credit,

shall … be determined in the same way as if that person were not subject to such control.”

5. The effect of this is reflected at paragraph 6B of the Immigration Rules, as it was when it was inserted from 15 March 2005:

“6B. A person shall not be regarded as having recourse to public funds if he is a person who is not excluded from specified benefits under section 115 of the Immigration and Asylum Act 1999 by virtue of regulations made under sub-sections (3) and (4) of that section or section 42 of the Tax Credits Act 2002.”

6. If that paragraph still governed applications for entry clearance, Mr Khera’s submission would be correct:

“In essence, the presence of the Appellant entering the United Kingdom may in fact affect the tax credits the Sponsor would receive but this would not affect the application for entry clearance.”

7. Since 31 March 2009, however, that is no longer the case. On that date a new para 6C was added to HC 395 (with para 6B being amended in consequence), which makes a distinction between in-country and out-of-country applications:

“6C. A person (P) making an application from outside the United Kingdom will be regarded as having recourse to public funds where P relies upon the future entitlement to public funds that would be payable to P or to P’s sponsor as a result of P’s presence in the United Kingdom (including those benefits to which P or the sponsor would be entitled as a result of P’s presence in the United Kingdom under the regulations referred to in paragraph 6B).”

8. In the instant case, if the appellant’s arrival from India were to result in increased tax credits being payable, then he would indeed be regarded as having recourse to public funds. Fortunately for him, there are documents in the previous Appellant’s Bundle which indicate that such is not likely to be the case. A communication from HM Revenue & Customs sets out the sponsor’s award of tax credits for the period in which the decision under appeal falls. It contains the following information:

“You must tell us if you marry or enter into a civil partnership, or start to live with someone as if you are married or in a civil partnership. This award will then end, and you will need to make a new claim with your partner, if appropriate.”

9. Until the appellant arrives in the United Kingdom and a new claim is made, we simply do not know whether the tax credits will go up. But looking at the ‘elements’ of which tax credits are made up, as tabulated by HMRC in the sponsor’s assessment, it would seem that the child tax credit payable on account of the sponsor’s two children would not be increased by the appellant’s arrival, although it could be reduced if the household income were to increase. On the other hand, the sponsor’s working tax credit might well go down, because there is a ‘lone parent’ element which she would lose once she ceases to be a lone parent. Of course, the claim as a single parent would be replaced by a claim as a couple. But as I understand it, a parent bringing up children on her (or his) own generally does get more in the way of working tax credits than a couple with children who are working and earning a similar amount. Critics of the tax credit scheme have gone so far as to say that it threatens the institution of marriage. Whatever the ramifications for social policy, for the purposes of immigration appeals it needs to be borne in mind that an appellant who is seeking a visa as the spouse or partner of a sponsor with children is likely to cause a reduction rather than an increase in the amount of working tax credit payable.

10. There has not yet been a ‘reported’ case on tax credits, and the way in which this complex benefit operates is not well known to immigration judges or, I dare say, to entry clearance officers. At the date of decision in the present case, the sponsor was receiving an income, inclusive of tax credits, well above what a family of two adults and two children would have been receiving on Income Support, which is considered the benchmark of adequacy for the purposes of the Immigration Rules. It was not known, at the date of decision, what amount of tax credits would be payable on the appellant’s joining the sponsor’s household, as a new claim would have to be made, but it could not be made until after the appellant had joined the household. But it seems most unlikely to me that the present weekly income of £575 would need to be increased overall on account of the appellant’s arrival. In the circumstances, it is only fair to allow the appeal.


11. The appeal is allowed.

Senior Immigration Judge McKee
(Judge of the Upper Tribunal)