Compliance checks carried out into claims and changes in circumstances in-year are known as examinations. This is not a statutory term, it is used to help Compliance distinguish these cases from enquiries made under section 19 of the Tax Credits Act (see TCTM10200), which can only be made after the year-end, when the claim has been finalised.
Compliance examinations are opened by issuing an opening letter in order to make a decision. We do this ‘by giving notice’. ‘By notice’ means it must be in writing. Once we have issued the written request we can then follow it up or pursue by telephone. We call this first letter an ‘informal letter’ as it cannot lead to a penalty being charged.
The following chapters cover the legislation which allows us to carry out Compliance examination action.