CCM10140 - Penalties and interest: failure to notify change of circumstances

Where someone fails to notify a notifiable change of circumstances, a penalty not exceeding £300 may be imposed by virtue of Section 32(3). The failure may occur in the following situations:

• the customer notifies the change of circumstances during the year but does so after the time limit
• the customer does not notify the change of circumstances during the year but does include it on the Section 17 declaration after the end of the year
• the customer does not notify the change of circumstances and it is picked up during an in-year examination - Section 16
• the customer does not notify the change of circumstances and then goes on to make an incorrect end of year declaration - Section 17.

Where you have carried out an examination you might have concluded that a notifiable change of circumstances occurred but the customer(s) failed to give notice within the prescribed time limit. In addition to amending the award in payment you need to consider whether it is appropriate to impose a penalty and if so, in the case of couples, you will have to decide which person will be charged the penalty - see CCM Chapter 8 - Closing the Examination CCM8240.

Where you have carried out an enquiry and have established the customer did not notify the change of circumstances and then went on to make an incorrect end of year declaration we could charge two penalties. However, where the S17 notice was made negligently, we will not pursue the S32(3) penalty for failing to notify the change. Instead we will pursue the S31(1) penalty for the incorrect statement and the maximum penalty is £3000.