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HMRC internal manual

Claimant Compliance Manual

HM Revenue & Customs
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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.