Tax Credits Act 2002 section 31

Incorrect statements etc

Section 31 sets out the penalties that may be imposed on individuals who fraudulently or negligently provide incorrect information in connection with tax credit claims, including how penalties apply to joint claimants and to agents acting on behalf of claimants.

• A penalty of up to £3,000 may be imposed on any person who fraudulently or negligently makes an incorrect statement, declaration, or provides incorrect information in connection with a tax credit claim, a change of circumstances notification, or in response to an official notice or requirement from HMRC.
• Where joint claimants are involved and one person incurs a penalty, the other joint claimant may also face a penalty of up to £3,000 — unless that other person was not aware, and could not reasonably have been expected to be aware, of the fraud or negligence.
• Where penalties are imposed on both joint claimants in respect of the same incorrect statement or information, the total combined penalty must not exceed £3,000.
• If someone acts as an agent or representative for a claimant — for example, in making a claim or responding to a notice — they are also personally liable to the same penalty provisions as if they were the claimant themselves.

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