Tax Credits Act 2002 section 33

Failure by employers to make correct payments

Section 33 establishes penalties for employers who fail to make correct tax credit payments to their employees as required under the employer payment arrangements.

• An employer who refuses or repeatedly fails to make required tax credit payments to an employee may face a penalty of up to £3,000.
• Where HMRC has to step in and pay the employee directly because of the employer's refusal or repeated failure, the penalty still applies to the employer.
• An employer who pays the wrong amount of tax credit to an employee for a tax year, due to the employer's fraud or neglect, may also face a penalty of up to £3,000.
• An employer cannot be penalised twice for the same underlying conduct — if a penalty has already been imposed for refusing or repeatedly failing to pay, no additional penalty can be imposed for incorrect payments that arose solely from that same refusal or failure.