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HMRC internal manual

Claimant Compliance Manual

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HM Revenue & Customs
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Discrepancy Examinations: Penalty Cases: Opening letter where there may be a penalty

Your first step is to decide whether a penalty might be appropriate, see CCM17215 

  • if a penalty might be appropriate - you will continue as shown below
  • if a penalty is not appropriate - see CCM17240 

Your first contact with the claimant(s) to open the examination must always be in writing. If the examination will cover more than one aspect of the claim, see CCM17620 before preparing your opening letter.

For cases where there may be a penalty you must use the standard template letter TCC82 for pre-award cases or TCC51 for post-award cases.

The letter formally opens your examination and tells the claimant what aspect of their award you are checking and what information you have. It then tells them you will be amending their claim or award to reflect the information you hold and if they do not agree with this information they must contact you within 21 days of the date of the letter. It also tells them we will be charging a penalty and asks them to tell us anything they want us to take into account.

You must enclose a copy of WTC/FS2 which explains the examination process to the claimant and also enclose a copy of the leaflet Tax Credit - Penalty decisions which tells them more about penalties.

You should always state the date by which the claimant should get back to you and allow at least 21 days. For example, if you wrote on 06/08/08, you would specify 27/08/08 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 21 days.

Your next action will depend on the response to the opening letter. If the claimant:

  • Replies and agrees that our information is correct, see CCM17650 
  • Replies but does not agree that our information is correct, see CCM17660 
  • Does not respond, see CCM17720.

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. If the claimant wants to discuss the penalty you will need to refer the call to a Band O.