Where an incorrect claim or statement has been made fraudulently
or negligently HMRC can charge a penalty in addition to recovering
any over-claim. The maximum penalty is £3,000 per incorrect
claim or statement.
There are different opening letters for cases with and
without penalties so you need to decide whether a penalty might be
appropriate. When the case was entered on TCW an entry should have
been made for the tax credit at risk. This is the amount that might
be overpaid if we do not review the award.
When an examination is worked pre-award the claimant will
not have received any payments for that claim. However, it is still
HMRC’s policy to charge penalties to deter claimants from
‘trying it on’.
When deciding if a penalty might be appropriate you should
consider the following:-
Step 1
Is the amount of the tax credit at risk £2,000 or more?
Step 2
Is the risk one of the following?
Step 3
Has there been a previous claim within the last 2 years that was adjusted following compliance action.
