In this section:
Tax credit penalties
We may charge you a penalty if we find that you have not told us about a change in your circumstances, or you have supplied incorrect information in your tax credits claim. If we do, we'll contact you to tell you - we never give automatic penalties.
When you may get charged a penalty
There are four reasons that we may charge a penalty:
- you've fraudulently given the wrong information on your tax credits claim - that is you deliberately gave the wrong information
- you've negligently given the wrong information on your tax credits claim - that is you didn't take enough care to make sure the information given was correct
- you didn't tell us about changes in your circumstances when you should do so
- you didn't give us the information or evidence we ask for
Giving the wrong information
If you've sent us wrong information - either fraudulently or negligently - we can charge you a penalty of up to £3,000.
Not telling us of changes in your circumstances
The tax credits you get depend on your circumstances and income. Some changes in circumstance mean that your tax credit payments will go down, for example you stop working or your child leaves full time education. You need to tell us about such changes within one month of the date they change. If you don't, we may charge you a penalty of up to £300.
Find out which changes you need to report within one month
If you don't give information or evidence we ask for
If we ask for information or evidence - for example to help us with a tax credit enquiry - you must send it to us. If you don't, we may charge you a penalty of up to £300. We can charge you an extra penalty of up to £60 each day until you send us the information.
Let us know if you've got a good reason for not giving us the information. For example your documents may have been destroyed or you've been ill.
Joint claims
If you've made a joint claim with your partner, you're both responsible for the information you give. We can charge you a penalty as a couple if:
- either of you could have told us about a change in circumstance
- you were both responsible for giving wrong information
If you give wrong information about yourself and your partner couldn't have known the information was wrong, we'll only charge you with the penalty.
What counts as a couple for tax credits?
Paying your penalty
We'll let you know if we think you should pay a penalty. We'll tell you:
- why we're charging it
- the maximum amount we may charge you
We'll consider lowering the penalty if there is reason to do so and we can talk about this with you.
The amount of your penalty
When we work out how much we'll reduce the penalty by, we always take into account:
- how helpful you've been
- if you've freely given us information to work out how much tax credits we should have paid you
- the amount of tax credits you over-claimed
- if we've charged you a penalty before
How to pay your penalty
Depending on your situation, you can pay all in one go, or in instalments. Once we've agreed the arrangement we'll ask you to sign a letter that sets out:
- the total amount you have to pay
- the final date you have to pay by, or the number of instalments and when you have to make them
We'll send you a final letter to accept the arrangement. This exchange of letters is a contract. If you refuse to pay, we'll take legal action to get back the money you owe.
Paying interest
You may be charged interest if you pay a penalty late.
If you disagree with the penalty
Please contact us if you disagree with the penalty we've charged you. If we can't agree, we'll send you a penalty notice. You can then appeal or ask a representative to appeal for you. You can contact us by calling the Tax Credit Helpline on Tel 0845 300 3900 or textphone 0845 300 3909.
Appealing against a tax credit decision
Contact us
You can contact our Tax Credit Helpline on Tel 0845 300 3900 or textphone 0845 300 3909 (open from 8.00 am to 8.00 pm, seven days a week except Christmas Day, Boxing Day, and New Year's Day).
