Guidance on whether a self-employed EEA national who gives birth continues in self-employment: Can the self-employed rely on Saint Prix C-507/12?

Tuesday 7 February 2017

Revenue and Customs v HD and GP (CHB) (Benefits for children - other) [2017] UKUT 11 (AAC) (Judge Ward), 12 January 2017 The Upper Tribunal considers two test cases examining whether EU national women who were engaged in self-employed activity until some point in their pregnancy and who returned to economic activity reasonably soon after their child’s birth have a right to reside and, if so, on what basis.

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Revenue and Customs v HD and GP (CHB) (Benefits for children - other) [2017] UKUT 11 (AAC) (Judge Ward) 12 January 2017

In Revenue and Customs v HD and GP (CHB) (Benefits for children - other) [2017] UKUT 11 (AAC) (Judge Ward), the Upper Tribunal considered two test cases examining whether EU national women who were engaged in self-employed activity until some point in their pregnancy and who returned to economic activity reasonably soon after their child’s birth have a right to reside and, if so, on what basis.

HD was a Lithuanian national and had been self-employed. She gave birth in August 2014 and her claim for child benefit was refused in February 2015 on the grounds that she lacked a right to reside. GP was a Romanian national who was also self-employed before giving birth in February 2015. Her claim for child benefit was similarly refused in April 2015. Both claimants appealed to the First-tier Tribunal (“F-tT”).

In HD’s case it found that she had been self-employed from December 2013 as a beauty therapist and that she had taken “maternity leave” from May 2014 until February 2015 during which she received maternity allowance. From April 2015 HD was forced to give up self-employment due to lack of work arising from moving house and therefore needing new client. Consequently, HD took up employment as a warehouse operative. In GP’s case, the F-tT found that she had commenced self-employment in March 2012 as a cleaner and that in December 2014 she “took maternity leave and ceased activity as a cleaner”. She maintained her registration as self-employed and resumed activity as a self-employed cleaner on 14 September 2015.

In both cases the F-tT concluded that the claimants had retained their self-employed status throughout their maternity leave, but in any event could rely on Saint Prix C-507/12 to retain their status. HMRC appealed to the Upper Tribunal in both cases arguing that there was insufficient evidence to conclude that self-employment had persisted throughout the maternity period and that there was nothing in EU law equivalent to Saint Prix in the case of workers which would allow any gap in self-employment there might have been to be bridged.

The Upper Tribunal said it is not necessary to be actively engaged in economic activity at every moment in order to maintain self-employment (SSWP v JS (IS) [2010] UKUT 240 (AAC)).  Nevertheless, the fact-finding by both tribunals was inadequate to support a conclusion that self-employment continued throughout. Having set the decisions aside, Judge Ward made further findings of fact in respect of both claimants:

  • In GP’s case, the Judge concluded that she had actively carried on cleaning right up to the start of her maternity allowance period. She had then made arrangements to preserve her customer base. GP actions showed a continuing attention to the operation of a business, and by the date of the decision on child benefit, GP intended to return to work albeit with a smaller client base - her claim thus succeeded whether or not Saint Prix applies to the self-employed.
  • In HD's case her self-employment had ceased to be genuine and effective in July 2014 when the combination of pregnancy and its associated difficulties and the house move led to a loss of custom. When treatment activity came to be resumed at the end of October 2014, it was on a much-reduced scale and on economic grounds was not set to, and in the event did not, continue except as a supplement to maternity allowance - it was therefore marginal and ancillary. It was therefore necessary to consider whether Saint Prix applied in HD's case.

Judge Ward stayed making a ruling on the Saint Prix issue in HD’s case saying it would be appropriate to await the ruling of the CJEU in C-442/16 Florea Gusa on self-employed EU citizens who had ceased economic activity. This is a reference from the Court of Appeal (Ireland) in Florea Gusa v Minister for Social Protection, Attorney General [2016] IECA 237.

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