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HMRC internal manual

Claimant Compliance Manual

HM Revenue & Customs
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Examinations: Pre-award penalty cases: Opening letter where there may be a penalty

Your first contact with the claimant(s) where you will open the examination must always be in writing. For cases where there may be a penalty you must use the standard letter template TCC72.

The letter formally opens your examination and tells the claimant what aspect of their claim you are checking and what information you need. It then tells them they will not receive any payments until they provide the information. It also tells them we may charge 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 credits - Penalty decisions which tells them more about penalties.

Where the claim has been made by a couple in a joint household, only one opening letter, WTC/FS2, and Tax Credits - Penalty decisions 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/FS2, and the leaflet Tax Credits - Penalty decisions must still be sent to each claimant.

You should always state the date by which the claimant should get back to you and allow at least 30 days. For example, if you wrote on 06/08/08, you would specify 05/09/08 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 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 a Band O. Having reminded the claimant of the HRA position, the Band O can enquire as to the reason for the error.