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HMRC internal manual

Claimant Compliance Manual

Penalties and interest: penalty warning letter

Where you believe you need the outstanding information or evidence to enable you to make a decision you will have to consider penalty action. Such penalties should only be used to secure worthwhile information and not to punish uncooperative customers.

By the time you come to consider penalties you will have already made at least two applications for the information; the informal request and the formal notice but it is still worth trying to contact the person by telephone to discuss whether they are having problems complying with your request. You should try to be helpful since the objective is to obtain the outstanding information.

Where you still have not received the outstanding information and you believe the case warrants penalty action to secure the information you should seek your manager’s approval to commence penalty proceedings. The approval must be confirmed in writing in your papers. In addition to confirming that penalties are appropriate, the manager must be satisfied that the previous letters have been correctly issued.

Once you have your manager’s approval you should issue the following warning letter with a copy to any agent acting.

“Dear Sir/Madam

I have again to remind you that you have not supplied the information requested in my letter dated…….. This request for information is made under the provisions of Section…… Tax Credits Act 2002.

A failure to comply with this request may lead to a penalty being imposed on you. This can be a maximum of £300. If you still do not supply this information a further penalty up to a maximum amount of £60 per day may be imposed.

I attach a copy of my previous request to remind you what information I require. This should be supplied to me by………. If you have any problems supplying the information or would like to discuss this letter please telephone me”

The letter should allow the person at least 30 days from the date of the warning letter to supply the outstanding details. If there is no reply by that date the papers will need to be submitted via your SO delivery manager to the Compliance Appeals Team who will prepare the referral to the Tribunals Service - see CCM10300.