CCM11350 - End of Year Issues: Sufficient information to make a decision
If you consider you have sufficient information to make a S18
decision on entitlement and there has been a response to the S17
notice (see
CCM11335), how you conclude the
examination will depend on what has been established. You will have
to decide whether it is appropriate to seek a penalty for the
incorrect claim or failure to notify a change of circumstances. In
practice you should have had this in mind during the working of the
examination as it affects some of the procedures.
Chapter 10 of the CCM contains detailed
guidance on when to seek a penalty. However, in deciding if a
penalty is appropriate for a case where you will also be making the
S18 decision, you will need to compare
- the tax credits payable under the original award and
- the tax credits that would have been payable if that information had been correct.
You will therefore need to make a manual calculation. Where the
information on the S17 notice (or notified to you by the claimant)
does not show any later changes of circumstance and it does not
show an increase or decrease of income beyond the specified limits
your calculation for (b) will be based on the same figure which
would eventually appear on the S18 notice.
If there has been some later change of circumstances or
income then your calculation for (b) will be an intermediate
figure. For example you open the examination 2003/2004 because you
believed child care costs were over-stated. The claimant has
admitted the costs are wrong but the S17 notice shows they had
another baby in February 2004. Your (b) figure will be based on the
details on the original claim with the exception of the child care
costs. This will show you how much had been over-claimed as a
result of the incorrect claim. This figure will be less than the
final figure which will appear on the S18 notice as this will take
account of the new baby.
Some claimants may find it difficult understanding why there
is perhaps a penalty when their final award will have increased.
You will need to explain the penalty relates to the incorrect
original claim and not any subsequent changes.
Once you have decided whether or not you will be seeking a
penalty you should refer to the appropriate guidance as
follows:
- no adjustment needed to the claim - see CCM11360
- adjustment needed to the claim but no penalty - see CCM11370
- adjustment needed to the claim and penalties appropriate - see CCM11380
