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HMRC internal manual

Claimant Compliance Manual

Examinations: Pre-award penalty cases: Accepting part of the claim

If after considering the claimants reply, you are now able to accept part of the claim, you can make a decision based on your conclusions. For example the risks were an Undisclosed Partner and Child Care Costs high compared to income. The claimant has convinced you they do not have a partner but they have overstated their child care costs. You will, therefore, accept their claim but will adjust the amount claimed for child care costs.

You must then decide if a penalty is due based on the adjusted details - see CCM4310.

  • If a penalty is no longer appropriate - close the case as shown at CCM4330.
  • If a penalty may still be appropriate - consult your Band O manager who will decide whether we will charge a penalty.

The Band O manager will need to consider the type of discrepancy and the claimant’s behaviour which led to the incorrect claim - see CCM10710. In deciding the behaviour category of the penalty the Band O manager will take into account any explanation the claimant has given regarding the error. If there is not enough information to decide on the category or your manager is not certain there is at least neglect, either your manager or another Band O will need to contact the claimant to discuss why they made the error in their claim.

If your manager decides there is no fraud or neglect there will be no penalty. You (the Compliance Officer) must close the case as shown in CCM4330.

If your manager decides to charge a penalty the papers should be referred to a Band O caseworker to continue to work the case.

Action by Band O caseworker

Your first step is to make the S14 decision. You must 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 the position on the phone.

You will then calculate the penalty. CCM chapter 10 gives detailed guidance on how to calculate the penalty. Once you have calculated the amount you should show the amount of the penalty on form 94NTC

You must use the standard letter template TCC78. The letter explains that you will be accepting part of their claim for that year and they will soon receive a formal notification of their award. It also explains we will be charging a penalty.

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.

Once you have issued the letter you must make the decision, then BF your papers for 30 days to allow for an appeal. If the claimant appeals, see CCM4710.