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HMRC internal manual

Claimant Compliance Manual

Examinations: Pre-award or change of circumstances penalty cases: The claim or notification cannot be accepted

Where you do not accept the explanation provided we will reject the claim or notification of change of circumstances. You must consult your Band O manager and your manager will decide whether we 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 behaviour 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 CCM4335.

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 for pre-award cases or S15 decision for change of circumstances cases. 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

For pre-award cases you must use the standard letter template TCC75. The letter explains that you will be rejecting the claim and they will soon receive a formal decision notice. It also explains we will be charging a penalty.

Note: If you are rejecting the claim because the customer has not replied to your opening letter, you can not use this as the reason for rejecting the claim on the letter. You must consider the risk and evidence held and your response to the customer must reflect that.

For change of circumstances cases you must use the standard letter template TCC89. The letter explains that you will be rejecting the change of circumstances. This letter carries the claimant’s appeal rights as no formal notification will be issued by the system. 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 this letter you must then reject the claim or the notification of the change of circumstances, and then BF your papers for 30 days to allow for an appeal.

If the claimant appeals, see CCM4710.