It is the policy of HMRC to impose monetary penalties on claimants who, in certain circumstances, fail to meet their obligations or do things incorrectly. There are different amounts of penalties for different situations. In addition to penalties interest may be charged in certain circumstances (see TCTM10800).
We can charge a penalty of up to £3,000 (see TCTM10500) if the claimant(s) makes a fraudulent or negligent claim for tax credits by:
- incorrect statements
- incorrect notification of change of circumstances
- supplying incorrect information
We can charge a penalty of up to £300 (see TCTM10600) if the claimant(s):
- fail to supply information or evidence - if the failure to supply information or evidence continues after the penalty is imposed a further penalty of up to £60 per day can be charged - s32 2 (b)
- fail to notify a notifiable change of circumstances - the penalty must not exceed £300 - s32 3
We do not charge a penalty if the claimant (s) have a reasonable excuse for not telling us about a change in their circumstances. There is only one penalty if the information is incorrect.
If the claimant(s) disagrees with the reason for the penalty or the amount of the penalty and we cannot reach agreement we will send them a formal penalty notice. This contains appeal rights under s38 1(c), until this stage the penalty is only a proposed amount. If the claimant(s) do not agree with the appeal we will send the claim to the First Tier Tribunal. If they subsequently do not agree with the First Tier Tribunal’s decision they can appeal to the Upper Tribunal.