Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Claimant Compliance Manual

From
HM Revenue & Customs
Updated
, see all updates

Penalties and interest: incorrect claims - behaviours leading to a penalty - enquiries or examinations

A penalty can be charged where a person makes an incorrect statement or declaration fraudulently or negligently.

For enquiries and examinations the level of the penalty will vary depending on the behaviour which led to the incorrect claim. The penalty is calculated as a percentage of the tax credits over-claimed and is rounded down to the nearest £10. The maximum penalty is £3,000 - see CCM10790.

Behaviours fall into one of two categories:

  • Mistake or misunderstanding - no penalty, see CCM10720.
  • Deliberate Error - from 30% (for a first offence) up to 100% (for a third offence or more) penalty - see CCM10750.

Note: It is the behaviour of the customer which determines the category of the penalty, not just the size of the over-claim. You need to establish the behaviour which led to the error and the penalty category it falls into.

To calculate the penalty for deliberate error, the calculation of the penalty should be a percentage based on the amount of tax credits the customer has tried to over claim. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

You will need to consider whether this is a first or subsequent offence. If a penalty has been imposed during the last three years, the previous penalty will be treated as the first offence. Therefore the latest offence will be treated as a subsequent offence under the New Penalty model and the Penalty will be charged using the appropriate rate. We can impose a penalty of up to a maximum of £3000 per award period.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)        
         
  (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If you have determined the behaviour is Deliberate Error and you are using an S17 notice to finalise one year and set provisional payments for the CY see CCM10810