CCM10745 – Penalties and Interest: Incorrect Claims – Examples of Serious Error - Enquiries or Examinations Opened on or after 6 April 2008

Example 1

Ravi entered his income as £10,000, but his income is £30,000. Ravi says that he mis-read his calculations and put down the wrong number. This is a Serious Error as Ravi failed to take reasonable care and a substantial over-claim is likely to result from understating income by £20,000. A claimant must know at least the rough level of his income: it is clearly a Serious Error to understate income by £20,000.

Example 2

Kimberley C’s child care costs were simple, but she still overestimated them by £20 per week. In completing her application Kimberley did not phone the Helpline or contact an external adviser for help.

Kimberley was careless in completing her claim, she did not seek help and still made a substantial error on a calculation which was simple in her case. This was a Serious Error.

Example 3

Assuming the same facts as Example 1 in CCM10735, where the resolution of that enquiry established that there was a Failure to Take Reasonable Care (whether or not a penalty was charged). Despite the warning to take more care with his claim in future, Ashley showed profits of £1,156 on the next year’s claim for tax credits when the correct figure should have been £11,560, giving rise to an over-claim of £2,345. You are satisfied this was a clerical error and there was no intent to over-claim credits. Ashley should have taken care to ensure all entries were correct, and he also ignored the previous warning to take more care in future, so this was a Serious Error