Bereavement Payment Denied

The High Court decreed that the Revenue acted fairly in not allowing a widower a bereavement payment in R (on the application of Wilkinson) v Commissioners of Inland Revenue.

THE TAXPAYER WAS widowed in 1999, and claimed a 'widower's bereavement allowance' in 2000. The Revenue refused the claim, on the ground that it was only available to widows. It refused to make an extra-statutory payment, even though it was within its power to do so. The High Court held that the Revenue was within its rights to refuse to make such a payment. The fact that another taxpayer had been granted a bereavement payment after taking his case to the European Court of Human Rights was irrelevant.

Mr Wilkinson's wife died in June 1999. In November 2000, he claimed what he described as a widower's bereavement payment equal to the widow's bereavement allowance under section 262(1), Taxes Act 1988.

In 1997, Mr Crossland, another widower, had brought a complaint before the European Convention on Human Rights alleging breach of Article 14 read with Articles 8 and 1 of the First Protocol. The Revenue reached a friendly settlement with Mr Crossland, paying him the amount that would have been due had widow's bereavement allowance been available to men at the time of his wife's death.

The Revenue, however, refused Mr Wilkinson's claim, saying that there was no basis in domestic law allowing widowers to claim widow's bereavement allowance.

In March 2001, Mr Wilkinson suggested that the Revenue pay him the widow's bereavement allowance by means of an extra-statutory equivalent using its care and management powers under section 1(1), Taxes Management Act 1970. The Revenue said that it could not do this, as it was not possible to use an extra-statutory concession to contradict unambiguous primary legislation, such as section 262, Taxes Act 1988.

Mr Wilkinson applied for judicial review on the grounds that:

• the refusal to grant widow's bereavement allowance to widowers was breach of Article 14 read with Article 1 of the European Convention on Human Rights;
• the Revenue did have the power under section 1, Taxes Management Act 1970 to grant him an extra-statutory allowance;
• section 6(1), Human Rights Act 1998 provided that it was unlawful for a public authority to act in a way that was incompatible with a convention right;
• section 6(2), Human Rights Act which disapplied section 6(1) did not apply since section 6(2)(a) applied where, as a result of the primary legislation, an authority could not have acted differently while the Revenue had the power to act by means of an extra-statutory concession, and section 6(2)(b) could not apply since section 262, Taxes Act 1988 read with section 1(1), Taxes Management Act 1970 gave the Revenue the power to act in a manner compatible with the convention;
• the Revenue was obliged out of fairness to give the allowance, in the light of the friendly settlement with Mr Crossland.

(Dinah Rose and Philip Baker for the taxpayer; Timothy Brennan QC and Ingrid Simler for the Revenue.)

Mr Justice Moses divided the case into four issues. The first was whether the Revenue's refusal to grant widow's bereavement allowance to widowers as well as widows contravened Article 14 read with Article 1 of the First Protocol of the European Convention on Human Rights. The judge said that it was quite clear that Article 14 read with Article 1 was breached in the absence of any justification for such discrimination.

He then moved on to the next issue, which concerned the Revenue's power to pay Mr Wilkinson the equivalent allowance by means of an extra-statutory concession. The judge said that he could find no distinction between extra-statutory concessions and the concession sought by Mr Wilkinson. Extra-statutory concessions existed which directly contradicted the intention of Parliament expressed in the provisions, and it was impossible to find any principle according to which in some cases the Revenue would grant a concession and in others not. The nature of extra-statutory concessions was haphazard, and Mr Justice Moses agreed with Lord Edmund-Davies in Vestey v Commissioners of Inland Revenue (No 2) [1980] STC 10, when he said that it was time to consider the basis of the power of the executive to make extra-statutory concessions.

The judge concluded that there was no reason why the Revenue should not issue an extra-statutory concession contradicting the legislation by allowing widow's bereavement allowance to be paid to widowers. The power given to the Revenue by section 1, Taxes Management Act 1970 was sufficiently wide to enable it to grant an extra-statutory concession when failure to do so would breach a taxpayer's rights under the European Convention on Human Rights.

The next issue was whether or not the Revenue was under a legal duty to given an extra-statutory allowance pursuant to section 6(1), Human Rights Act 1998. The judge said that the primary legislation in section 262, Taxes Act 1988 made it clear that the widow's bereavement allowance was only to be given to widows. Therefore, the Revenue was bound to refuse Mr Wilkinson's claim for it. However, while the section did not prohibit the use of the care and management powers in section 1(1), Taxes Management Act 1970, it did not impose a duty on the Revenue to pay an extra-statutory allowance to widowers. This would be impossible, given the references to 'married men', 'wife' and 'him' in section 262.

The judge said that the 'fatal flaw' in the taxpayer's argument was that it tried to convert power to give an extra-statutory allowance into a duty. In refusing to exercise its power to make such an allowance, the Revenue was giving effect to primary legislation which was not compatible with the European Convention on Human Rights. However, it was entitled to rely on section 6(2)(b), Human Rights Act 1998, and did not act unlawfully by failing to make the allowance.

Finally, Mr Justice Moses considered the fairness aspect, i.e., was it fair to treat Mr Wilkinson differently from Mr Crossland, who had been awarded an allowance. He said that the Revenue was obliged to treat taxpayers fairly and without unjustified discrimination. However, a taxpayer bringing proceedings in Strasbourg, as Mr Crossland did, was not in the same position as one who brought proceedings in the United Kingdom. Therefore, there was no unfair treatment.

Overall, Mr Justice Moses concluded that section 262 was incompatible with Article 14 read with Article 1 of the First Protocol; that the Revenue does have power to issue an extra-statutory concession giving an allowance to widowers; that in refusing to exercise that power, the Revenue was giving effect to section 262; and that the Revenue had not acted unfairly by failing to treat Mr Wilkinson in the same way as Mr Crossland.

However, Mr Justice Moses agreed to make a declaration of incompatibility in relation to section 262.

(Reported at [2002] STC 347.)

Commentary by Allison Plager

The gut reaction to the outcome of R (on the application of Wilkinson) v Commissioners of Inland Revenue is to say that it seems ludicrous that one taxpayer can be granted an allowance that strictly does not exist, but not another, purely on the basis that the one went to a European court, i.e., the European Court of Human Rights, and the other went to the domestic court. It is also seemingly illogical to accept that although the Revenue could rectify what the judge acknowledges is a discriminatory law, by means of an extra-statutory payment, it could choose not to.

There are times when Mr Bumble's comment that 'the law is a ass', is particularly apt, and this is one of those times. However, had the judge taken a more subjective view, and agreed that a bereavement payment be made, then this would presumably in the Revenue's eyes open the floodgates to thousands of similar claims.

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