CCM2240 - Compliance Strategy: Should I open an Examination or an Enquiry

Where there is a risk that we are currently paying out too much tax credits, we need to take prompt action to revise the award. However, in many situations if we amend the current year award (CY) the tax credit system will automatically amend the previous year award (PY) and that is not lawful unless we have opened an enquiry. You should therefore follow the rules set out below:-

1. If the risk concerns the income for the PY – start with an enquiry and amend both the CY and PY if you establish the claimant has used the wrong figure on the claim.
   
   
2. Where the risk primarily relates to the CY – start with an examination.
   
   
3. Where the risk arises from information provided by the childcare provider for the CY – start with an examination.
   
   
4. Where the risk clearly relates to the PY – start with an enquiry and amend both the CY and PY as soon as possible.
   
   

Where you start with an examination and you find out the change(s) also affects the PY you must issue a S19 notice of enquiry for the PY before you amend either the PY or the CY.