CCM10250 - Penalties and interest: no reply to S17 notice

S32(1)(b) provides for penalties where a person does not respond to a S17 notice. There is no penalty for customers on the flat rate family element because the S17 notice tells them that if they do not reply they will be deemed to have confirmed their income and circumstances are as shown on the notice.

In most cases even though penalties can be charged you will not need to consider such action. Where the customer does not respond to the S17 notice by the first specified date, see CCM11040, we will automatically:-

  • stop the run-on payments for the current year and seek to recover these payments
  • finalise the previous year under S18 based on the information held at 5 April

If you believe the award for the previous year is incorrect you will be able to open an enquiry under S19 as soon as the S18 decision has been made.

There is little to be gained by trying to encourage the customer to return the S17 notice so penalties will not normally be appropriate.

Where an examination is still open at 5 April you will not be able to finalise the case until you are in a position to make a S18 decision but you will not be able to do this until the customer has responded to the S17 notice. You might, therefore, want to consider penalties for failure to return the notice but in most cases this will not be appropriate.

We cannot compel a customer to return the notice before the first specified date but if they have not returned it by that date we can take the action described above. There will usually be little to be gained by commencing penalty action to secure the S17 notice. If the customer has responded to your examination but has failed to return the S17 notice you will be able to make the S18 decision based on the information you hold. If the customer has not responded to your examination and has also failed to return the S17 notice, penalty action is unlikely to encourage compliance. However, if you believe a penalty is appropriate see CCM10280.

If you are working from a returned incorrect S17 and you have determined fraudulent/non fraudulent behaviour see CCM10810.