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HMRC internal manual

Claimant Compliance Manual

Enquiries: Post award penalty cases: Opening letter where there may be a penalty

Your first step is to decide whether a penalty might be appropriate, see CCM16230 

  • if a penalty might be appropriate - see below
  • if a penalty is not appropriate - see CCM16240 

Your first contact with the claimant(s) to open the enquiry must always be in writing. You must use the standard template letter at TCC1a

The letter tells the claimant what information you need. The letter also tells them we may charge a penalty and asks them to tell us anything they want us to take into account.

You must also enclose a copy of the WTC/FS1 fact sheet which explains the examination process to the claimant and also a copy of the Tax Credits - Penalty Decision leaflet which tells them more about penalties.

Where the claim has been made by a couple in a joint household, only one opening letter, WTC/FS1, and a copy of the Tax Credits - Penalty Decision leaflet should be sent addressed to both claimants even if the query only relates to one of the claimants. When sending out joint letters the claimants must still be part of a couple and residing at the same address. If they are part of a couple but residing at different addresses or no longer part of a couple, then a separate letter, WTC/FS1 and Tax Credit Penalty Decision leaflet must still be sent to each claimant.

You should always state the date by which the claimant should reply and allow at least 30 days. For example, if you wrote on 06/08/08, you would specify 15/09/08 for a response. If you are aware that postal delays are likely, for example there is a strike or it is close to Christmas, allow a few extra days. Also allow a longer time if you know for example the claimant is abroad or incapacitated and it means they will not be able to reply within 30 days.

Your next action will depend on whether there is any response to the opening letter. If the claimant:-

If the claimant phones you to discuss your letter, make full notes of everything they say and keep a record in your papers. If the claimant has fully answered your queries over the phone they do not need to reply in writing. You can discuss any aspects of the claim that are of concern but if the claimant wants to discuss the penalty you will need to refer the call to be a Band O. A Band O, having reminded the claimant of the HRA position, can enquire as to the reason for the error.

If the opening letter is returned RLS or you know it has not been received by the claimant (or either claimant where the claim was made by a couple) - see CCM16250.