The Tax Credit Office may charge you a penalty if you supply incorrect information, or don't tell them about a change in your circumstances. But they'll contact you to tell you - they never give automatic penalties.
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The reasons that the Tax Credit Office may charge a penalty are:
If you've given the Tax Credit Office wrong information and you've been paid too much tax credits, they can charge you a penalty of up to £3,000.
The Tax Credit Office may charge a penalty if you gave wrong information:
If you realise you've made a mistake with information you've given, you should let the Tax Credit Office know straightaway. If you're already getting tax credits, they will use the latest information you give to work out whether you should be getting more or less. If you are entitled to less tax credits, you will have to pay the money you shouldn’t have had back.
The Tax Credit Office won't charge a penalty if you took reasonable care, but still made a mistake and claimed too much tax credits.
The tax credits you get depend on your circumstances and income.
You need to report some changes in your circumstances within one month - for example stopping working, or your child leaving full time education.
If you don't report a change on time, you could get paid too much in tax credits. If this happens, the Tax Credit Office may charge you a penalty of up to £300.
If the Tax Credit Office asks you for information or evidence you must send it to them. They might need the information for example to help them with a tax credit check (an 'enquiry' or 'examination').
If you don't give the information or evidence, the Tax Credit Office may charge you a penalty of up to £300. They can charge you an extra penalty of up to £60 each day until you provide it.
Let them know if you've got a good reason for not giving them the information. For example your documents may have been destroyed or you've been ill.
If you've made a joint claim with your partner, you're both responsible for the information you give. The Tax Credit Office can charge you a penalty as a couple if:
If you give wrong information about yourself and your partner couldn't have known the information was wrong, the Tax Credit Office will only charge you with the penalty.
The Tax Credit Office will let you know if they think you should pay a penalty. They'll tell you:
The Tax Credit Office will consider lowering the maximum penalty if there is reason to do so - they can talk to you about this.
When the Tax Credit Office work out how much they'll reduce the maximum penalty by, they always take into account:
Depending on your situation, you can pay all in one go, or in instalments. Once the Tax Credit Office has agreed the arrangement they'll ask you to sign a letter that sets out:
They'll send you a final letter to accept the arrangement. This exchange of letters is a contract. If you refuse to pay, the Tax Credit Office will take legal action to get back the money you owe.
You may be charged interest if one of the following applies:
Please contact the Tax Credit Office if you disagree with the penalty they've charged you. If they can't agree with you, they'll send you a penalty notice. You can then appeal or ask a representative to appeal for you. You can contact the Tax Credit Office by calling the Tax Credit Helpline.