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HMRC internal manual

Tax Credits Technical Manual

Section 32 Penalties - failure to comply with requirements

The Tax Credits Act 2002, Section 32

(see TCTM12000)

We can charge a penalty of up to £300 if the claimant(s) do not provide information or do not tell us about certain changes of circumstance.

s32 (1) Where a person fails -

    to provide any information or evidence which he is required to provide by virtue of section 14(2), 15(2), 16(3), 18(10) or 19(2) or regulations under section 25, or   

    to comply with a requirement imposed on him by a notice under section 17 by virtue of subsection (2)(a), (4)(a) or (6)(a) of that section   

Penalties under s32(1) apply when a person fails to provide information or evidence requested by formal notice under section 14, 15, 16, 17, 18 or 19 of the Tax Credits Act. In these circumstances a penalty under s32(2) can be imposed. The penalty is not intended to punish a person who will not provide information. The penalties are intended to encourage people to comply with the notice. In most cases (other than s17 notices) we begin by making an informal request for information or evidence. This informal request does not carry any penalties. If there is no reply we can send a further written request which explains that penalties can be charged.

s32 (2) The penalty amounts are-

(a) a penalty not exceeding £300, and   

(b) if the failure continues after a penalty is imposed under paragraph (a), a further penalty or penalties not exceeding £60 for each day on which the failure continues after the day on which the penalty under that paragraph was imposed (but excluding any day for which a penalty under this paragraph has already been imposed).   

Where someone fails to notify a change of circumstances, within the prescribed time limit, a penalty not exceeding £300 may be imposed by virtue of section 32(3) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

S32 (3) Where a person fails to give a notification required by regulations under section 6(3), a penalty not exceeding £300 may be imposed on him.

Please note: a failure to notify a change in circumstance must not be confused with an incorrect response to an s17 notice. Many claimants return their s17 notice saying there have been no changes when in fact there has been. Although this begins as a late or failure to notify a change it then becomes an incorrect statement for which a maximum penalty of £3000 can be charged.