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HMRC internal manual

Claimant Compliance Manual

Cashcheque offences: Letters and forms: Claimant Compliance Team: Opening letters

This letter should be issued exactly as shown below i.e. on blank paper (not letter-headed), without any header or footers and you should not vary the text in any way. This letter should accompany the opening letters at CCM9260


Why we are sending you this note

We are contacting you because we have a query about tax credits that have been paid from an altered or missing cashcheque. Missing cashcheques includes cashcheques that have been reported as lost, stolen or not received. This note explains how we go about this.


We want everyone entitled to tax credits to receive the correct amount at the right time. We will do everything we reasonably can to help ensure this happens.

We want you to know that we will operate the tax credit system fairly by making sure that only those entitled to tax credits receive them. To enable us to do this, we will investigate cases where we think incorrect payments may have been made.

Conducting an investigation

We will tell you what your rights and responsibilities are.

We will ask only for information that we believe is relevant to the payments of tax credits made from your altered or missing cashcheque.

It is very important that the information you give us is correct as far as you know. If you give us information that you know is wrong, you could be prosecuted.

We will carry out our investigation promptly and bring it to a close once we are satisfied everything is in order.

If we find something wrong

If we find you have been overpaid tax credits we may ask you to repay the amounts that have been incorrectly paid after the end of the year, when your final entitlement to tax credits is known.

We can charge penalties during the year on incorrect payments where the mistake was made deliberately. The penalty can be up to a maximum of £3000.

When deciding on the level of any penalty, we will take into account:

  • the amount of the overpaid tax credits and
  • how serious the circumstances were.

We would welcome your co-operation with our enquiry in establishing the correct amount of tax credits paid. The extent to which you co-operate with us and provide us with the information is entirely a matter for you. In making your decision you may wish to get help from a professional adviser. Our query may show that you have committed an offence for which you may be asked to pay a penalty as described in the attached WTC7 leaflet - “Tax Credit Penalties - What happens at the end of a check”.

At the end of our enquiries if we are unable to agree with you, the information or documents you provided during our enquiries may be used in any appeal proceedings to decide your entitlement to tax credits and your liability to repay any tax credits overpaid and / or any interest and penalties.

If there is anything you wish me to take into account when I consider whether a penalty should be charged, please let me know as soon as possible.

We will look for an agreed offer from you to cover the penalty where appropriate. If we cannot agree, we may use our legal powers to collect the penalty we think is due. You have the right to appeal against this decision, and you can ask for the appeal to be heard by the Independent Appeals Tribunal.