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HMRC internal manual

Claimant Compliance Manual

Examinations: Post-award penalty cases: Opening letter where there may be a penalty

Your first step is to decide whether a penalty might be appropriate, see CCM4410 

  • if a penalty might be appropriate - see below
  • if a penalty is not appropriate - see CCM4415 

Because you are using the examination powers under S16 TCA 2002 your first contact with the customer(s) to open the examination must always be in writing. You must use the standard template letter at TCC2a.

The letter tells the customer what information you need. The letter also tells them we may charge a penalty and asks them to tell us anything they want us to take into account.

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

You should always state the date by which the customer should reply and allow at least 30 days. For example, if you wrote on 06/08/10, you would specify 05/09/10 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 customer is abroad or incapacitated and it means they will not be able to reply within 30 days.

Your next action will depend on whether there is any response to the opening letter. If the customer:-

If the customer phones you to discuss your letter, make full notes of everything they say and keep a record in your papers. If the customer 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 customer wants to discuss the penalty you will need to refer the call to be a Band O. Having reminded the customer of the HRA position, the Band O can enquire as to the reason for the error.

If the customer requests more time to respond - see CCM4416