TFC60200 - Penalties: penalties for inaccuracies
Penalty for inaccurate declaration of eligibility
Childcare Payments Act 2014, section 42
HMRC may impose a penalty on a person for making an inaccurate declaration of eligibility where the inaccuracy is careless or deliberate. A person who makes an inaccurate declaration of eligibility, or for whom an inaccurate declaration of eligibility is made by someone acting on their behalf, is liable to a penalty if the person becomes aware of the inaccuracy after the declaration has been made but does not take reasonable steps to inform HMRC. An inaccuracy is careless if the person making the declaration of eligibility failed to take reasonable care.
Maximum amount of penalty for deliberate inaccuracy
Childcare Payments Act 2014, section 42(4)
The penalty for an inaccuracy which is deliberate will be 50% of the amount of the maximum available top-up payment for the entitlement period for which the declaration of eligibility was made.
Maximum amount of penalty for other inaccuracies
Childcare Payments Act 2014, section 42(5)
The penalty for any other inaccuracy will be 25% of the maximum available top-up payment for the entitlement period.
For a standard entitlement period, the maximum available top-up payment will be £500, as this is 25% of the maximum qualifying payment that can be paid into a childcare account under section 19 of the Act (see TFC35100 - qualifying payment). This means that the penalty for an inaccuracy that is deliberate will be £250 and the penalty for any other inaccuracy will be £125.
Childcare Payments Act 2014, section 42(6)
The maximum available top-up payment for an entitlement period is the amount that would be payable by HMRC if qualifying payments equal to the relevant maximum for the entitlement period were made into the childcare account in respect of which the declaration was made.
Childcare Payments Act 2014, section 42(7)
Where the maximum qualifying payment has been amended under section 19(5) of the Act, the maximum available top-up payment would reflect this amount.
Where a person has asked HMRC to increase the maximum qualifying payment under section 19(6) of the Act, the penalty is to be calculated on the basis of that higher amount.