Discrepancy Examinations: Penalty Cases: General
Where an incorrect claim or statement has been made fraudulently or negligently HMRC can charge a penalty in addition to recovering any overpayment. The maximum penalty is £3,000 per incorrect claim or statement.
There are different opening letters for cases with and without penalties so you need to decide whether a penalty might be appropriate – see CCM17215.
The calculation of the penalty and contact with the claimant regarding the payment of the penalty must be handled by a Band O or above.