CCM14220 - Closing the Enquiry: Issuing the penalty leaflet

Where penalties are likely to be considered you must make the claimant(s) aware of their rights and issue the penalty leaflet.(WTC7). You should do this at the earliest possible opportunity. The stage at which this happens will vary from case to case.

Where the enquiry is being progressed by correspondence or worked remotely – see CCM14230.

Where you are at a meeting with the claimant and it is clear that Section 31(1) Penalties are likely to be considered, you should draw the claimant's attention to any clear errors established, the facts already obtained and a general outline of any other areas of concern. You should then tell the claimant about the possibility of penalties and that they do not have to co-operate with your enquiry. You will need to cover the same points as in the draft letter at CCM14230 below. You should take these steps even if you have not quantified the amount of any adjustment to the tax credits.

This stage will be reached where the claimant has admitted an error for which a penalty is likely to be considered or the claimant has denied any errors but you have presented your own findings.

You do not need to have quantified the adjustments needed to the award before you issue the WTC7 and it is inappropriate to delay this action. Where a meeting has been amicable it might seem unreasonable to bring up the subject of penalties, however, you must not leave the claimant in a state of uncertainty if you believe penalties are likely to be considered.

You should then hand out the enquiry settlement and penalty leaflet (WTC7), ask the claimant if they understand what you have just explained and if not go through it again. At that stage, you can invite them to explain the errors and make any further clarification or disclosures. The notes of the meeting should record what was said by you and the claimant's response (if any) and a copy of the notes must be sent to the claimant.

If the claimant says they will not answer any questions you should tell them you can use your formal powers to obtain information required in order to establish the amount of tax credits due.