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HMRC internal manual

Claimant Compliance Manual

HM Revenue & Customs
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Closing the enquiry: issuing the penalty leaflet: cases worked by correspondence

Where penalties are likely to be considered you must make the customer aware of their rights and issue the penalty leaflet Tax Credit - Penalty decisions. The stage at which this happens will vary from case to case but it includes the following:

  • You have held a fact-finding meeting with the customer and told them you will review and consider their explanation, evidence etc before writing to them with your conclusions.
  • You have requested a meeting with the customer to discuss your conclusions but the customer refuses to attend or does not turn up for the meeting.
  • You are working the enquiry by correspondence and having reviewed the ’s explanation, evidence etc you are now writing with your conclusions.

Note: If the enquiry was opened on or after 6 April 2008, your letter must include the following text:

“We would welcome your co-operation with our enquiry and in establishing the correct amounts of tax credits due. The extent to which you co-operate with us and provide us with the information is entirely a matter for you. In making your decision you may wish to get help from a professional adviser. Our enquiry may show that an offence has been committed for which you may have to pay a penalty as described in the attached leaflet Tax credits - Penalty decisions.

At the end of our enquiry if we are unable to agree with you, the information or documents you provided during the enquiry may be used in any appeal proceedings to decide your entitlement to tax credits and your liability to repay any tax credits overpaid and/or any interest and penalties.”

If the customer is represented by an adviser you will need to send a copy of the letter and leaflet to their adviser.

If the claim was made by a couple and you have not yet decided which of them will be asked to pay the penalty, or you have already decided they will both have to pay a penalty, then you must ensure that they have each been given a copy of the Tax credits - Penalty decisions leaflet and if necessary the letter described above.

Where the enquiry is being worked by correspondence and the customer telephones you to discuss the enquiry - see CCM14240.