CCM10160 - Penalties and Interest: Failure to Notify Change of Circumstances – Penalty Examples

Example 1

Jackie was awarded tax credits of £884 for 2007/2008. On 18 October 2007 you open a Section 16 examination because you believe Jackie’s childcare costs have ended. Jackie admits they ended on 5 May 2007 when her son went to live with his father. She has failed to notify a notifiable change of circumstances within the prescribed time limits so a penalty may be imposed. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Example 2

Donna was awarded tax credits of £4212 for 2007/2008. On 17 November 2007 you open a Section 16 examination because you believe she is now living with Tom. Donna admits Tom moved in with her on 1 June 2007 so her award should have come to an end that day as there was a change in the makeup of the household. She has failed to notify a notifiable change within the prescribed time limits so a penalty may be imposed. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Example 3

Jill was awarded tax credits of £5408 for 2007/2008. On 1 December 2007 you open a Section 16 examination because you have information to suggest her childcare costs for her son ceased in June 2007. Jill admits these costs ceased on 24 June 2007 and so she has failed to notify a change of circumstances. During your Section 16 examination you notice that in 2006/2007 Jill also failed to notify a notifiable change of circumstances within the prescribed time limits. On that occasion she corrected it on her Section 17 declaration but it was not picked up for enquiry. Even though there are two failures the first failure did not attract a challenge by HMRC (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Jill will be warned of the consequences of any failures in the future.

Example 4

Amber was awarded tax credits of £6032 for 2007/2008. On 2 September 2007 you open a Section 16 examination because you have information to suggest her childcare costs for her son, Jason, ceased on 24 April 2007. Amber admits the failure to notify a change of circumstances. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

A penalty of £100 is imposed on 27 September 2007. On 12 February 2008 you open another Section 16 examination because you have information to suggest her childcare costs for her daughter, Kylie, ceased on 30 September 2007. Amber again admits the failure to notify a change of circumstances (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Example 5

Cathy was awarded tax credits of £4745 for 2007/2008. On 6 October 2007 you open a Section 16 examination because you believe Cathy is now living with Bill. Cathy admits Bill moved in on 7 May 2007 so she had failed to notify a notifiable change in the makeup of the household. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

On 4 January 2008 a Section 19 enquiry is opened for 2006/2007 following risk assessment. The Section 17 end of year declaration indicates there might have been a change in childcare costs during the year. Cathy admits she stopped using childcare for her daughter in August 2006 and this resulted in £60 credits being paid per week that were not due. There has been a failure to notify a notifiable change of circumstances. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Although this is the second such penalty, the failure occurred before the one which was challenged in October 2007. We had therefore not had an opportunity to explain the implications of any future failures. This situation is quite unusual, normally failures will be spotted in chronological order.