CCM8370 - Closing the Examination: Penalty Cases - Informing the Claimant(s)
Once you have established all of the facts relevant to the
period covered by your examination, you should advise the claimant
you will be issuing a formal decision notice and how your
settlement will be concluded. Where there is a recoverable
overpayment you should invite the claimant to make an early payment
on account.
How you advise the claimant will depend on the circumstances
of the case. It might be during a meeting, in which case your notes
will reflect what you told them or you might explain this in a
letter. You will need to cover the following:
- The decision
For a pre-award examination this will mean the issue of an initial decision notice and for a post-award examination it will be an amended decision notice to either amend or terminate the award. For an examination into an unprocessed notification of a change of circumstances this will be to amend the award or confirm it stays in the original amount. Where there has been an enquiry for an earlier year or you intend to make a discovery decision you should explain a decision notice will also be issued for that year(s). You should tell the claimant they will have a right of appeal against the formal decision.
- The settlement
You should tell the claimant that HMRC’s preferred method of settlement for cases involving a penalty is a contract settlement in which they offer to pay the penalty. In some situations there will also be an overpayment which now needs to be repaid (see CCM8235 for details of these situations) and where this applies the overpayment plus any interest will be included in the letter of offer. The offer will state the date(s) on which the monies will be paid. Where there is an overpayment to be included in the offer you must tell the claimant to ignore the message on the decision notice regarding recovery of the tax credits overpaid. You will be intending to recover this overpayment as part of the contract settlement and you will contact them again in 30 days time.
Once you have advised the claimant of the position you should revise the award as shown in CCM8380.
