Tax Credits Act 2002 section 32

Failure to comply with requirements

Section 32 sets out the financial penalties that HMRC can impose on tax credit claimants who fail to provide required information, evidence, or notifications in connection with their tax credits claims.

• An initial penalty of up to £300 can be imposed for failing to provide information, evidence, or notifications required under various provisions of the Act, with a continuing daily penalty of up to £60 for each day the failure persists after the initial penalty is imposed.
• A penalty of up to £300 can be imposed for failing to notify HMRC of a change of circumstances as required by regulations.
• No penalty can be imposed once the failure has been remedied, and a person is not treated as having failed if they had a reasonable excuse, if HMRC allowed additional time, or if they complied without unreasonable delay after the excuse ceased.
• Where both members of a couple fail to comply, the combined penalties for both of them together cannot exceed the maximum that would apply to a single person — that is, no more than £300 initially (plus £60 per day for continuing failures), or no more than £300 in total for a failure to notify a change of circumstances.