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HMRC internal manual

Claimant Compliance Manual

Enquiries: Penalty cases: Adjustment needed to the award and the year following the enquiry is the current year

Before taking any action to adjust the award you must consider whether any adjustments are needed to an earlier award. For example the enquiry has established that child care costs are incorrect and were also overstated in the previous year. If an earlier year also needs to be adjusted see CCM14205. However, you must not go back to PY-1 or earlier years without agreed and documented approval from your manager. After issuing the letter in CCM14106, BF your papers for 7 days and then continue as shown below.

You must then write to the claimant(s) to let them know about your decision. You should always write to them even if you have spoken to them and explained to them the position on the phone.

You must use the standard letter template TCC94. The letter explains your conclusion and they will soon receive a formal decision notice. It also explains we will be charging a penalty. Where there is no continuing award the letter also explains you will be asking them to repay the overpaid tax credits.

Where the claim has been made by a couple in a joint household, only one letter should be sent addressed to both 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 must still be sent to each claimant.

If the claimant has authorised an agent to act for them remember to send a copy of the letter to the agent.

You should then take the necessary action to amend the award see CCM16590.