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HMRC internal manual

Tax Credits Technical Manual

Penalty - Incorrect statements: Considering neglect

In all cases where there has been an incorrect claim and a penalty is considered we must establish why the claimant made the error. We need to decide if their action or lack of action amounts to neglect. In deciding whether or not there is neglect you will need to consider whether the claimant took reasonable steps to make a correct claim. We must also decide what behaviours have led to the incorrect statement being made. Penalties are calculated as a percentage of the tax credits over-claimed.