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 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 examination. You will need to cover the same
points as in the draft letter at
CCM8310, but you can say this in your own
words. You should take these steps even if you have not quantified
the amount of any adjustment to the tax credits. 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.
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 important not 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 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.
