The Minister may impose a penalty on a person if satisfied, on the balance of probabilities, that the person has carried out, or conspired to carry out, fraud—

(a)

in order to receive or help another person to receive a payment that is or, if the payment was not made, would have been, a recoverable amount, or

(b)

with the result that a public authority is entitled to claim any other recoverable amount.

52Application to members etc of bodies

(1)

Subsection (2) applies where a body is liable to receive a penalty under section 51 by reason of anything which the Minister is satisfied, on the balance of probabilities, was done or not done with the consent or connivance of—

(a)

a relevant individual in relation to the body, or

(b)

an individual purporting to act in the capacity of a relevant individual in relation to the body.

(2)

The Minister may impose a penalty under section 51 on the individual as well as on the body.

(3)

In this section, “relevant individual” means—

(a)

in relation to a body corporate other than one whose affairs are managed by its members, a director, manager, secretary or other similar officer of the body;

(b)

in relation to a limited liability partnership or other body corporate whose affairs are managed by its members, a member who exercises functions of management with respect to it;

(c)

in relation to a limited partnership, a general partner (within the meaning given by section 3 of the Limited Partnerships Act 1907);

(d)

in relation to any other partnership, a partner;

(e)

in relation to an unincorporated association, a person who exercises functions of management with respect to it.

53Amount of penalty relating to fraud

(1)

A penalty imposed on a person under section 51(a) may not exceed 100% of the payment to which it relates.

(2)

Where a penalty is imposed under section 51(a) in relation to conduct which does not result in a person receiving a payment, subsection (1) is to be read as if the reference to “the payment” were to the payment which, in the opinion of the Minister, a person would have received if a payment had been made in consequence of the conduct.

(3)

A penalty imposed on a person under section 51(b) may not exceed 100% of—

(a)

any loss caused to the public authority, or

(b)

if higher, the benefit gained by the person,

as a result of the fraud in question.

54Penalty for failing to comply with requirements

The Minister may impose a penalty on a person where the Minister considers that the person has, without reasonable excuse, failed to comply with—

(a)

a requirement imposed by or under Chapter 2 (investigatory powers), or

(b)

a requirement imposed by or under Chapter 4 (methods of recovery).

55Application to members etc of bodies

(1)

Subsection (2) applies where the Minister considers that—

(a)

a body has, without reasonable excuse, failed to comply with a requirement mentioned in section 54, and

(b)

a relevant individual in relation to the body has, without reasonable excuse, failed to prevent that failure.

(2)

The Minister may impose a penalty under section 54 on the individual as well as on the body.

(3)

In this section, “relevant individual” in relation to a body has the same meaning that it has in section 52.

56Amount of penalty for failing to comply with requirements

(1)

A penalty imposed for a failure to comply with a requirement to provide information imposed by or under Chapter 2 or Chapter 4 must be an amount calculated by reference to a daily rate of £300.

(2)

Any other penalty for a failure to comply with a requirement imposed by or under Chapter 2 or Chapter 4 must be a fixed amount of £300.

(3)

In this section, references to a “daily rate” in relation to a person’s failure to provide information are to an amount that may be imposed for each day by the end of which the information has not been provided, beginning with the last day on which compliance would have resulted in a penalty not being payable.

(4)

The Minister may by regulations amend the amounts mentioned in subsections (1) and (2) for the time being to reflect a change in the value of money.

(5)

Regulations under subsection (4) are subject to the negative procedure.

57Procedural rights

(1)

This section and sections 58 and 59 set out steps that must be taken before the Minister may impose a penalty on a person under section 51 or 54.

(2)

Where the Minister proposes that a person should be given a penalty under section 51 or 54, the Minister must give the person a notice (a “notice of intent”) inviting them to make representations about the proposed penalty.

(3)

The notice of intent must include—

(a)

the amount of the proposed penalty,

(b)

the reasons for the penalty being of that amount, and

(c)

the means by which, and the period within which, representations may be made.

(4)

The period must be at least 28 days beginning with the day after the day on which the notice is given.

(5)

The Minister must—

(a)

consider any representations received in accordance with the notice, and

(b)

in light of those representations—

(i)

decide whether to impose the penalty, and

(ii)

make any changes to the terms of the proposed penalty that the Minister considers appropriate.

(6)

Where the Minister decides not to impose a penalty on the person, the Minister must give the person a notice to that effect.

58Penalty decision notices

(1)

Where the Minister decides to impose a penalty on the person, the Minister must give the person a penalty decision notice.

(2)

A penalty decision notice is a notice—

(a)

informing the person of the decision that a penalty should be imposed on the person,

(b)

stating the amount of the penalty,

(c)

setting out the reasons for the penalty being of that amount,

(d)

explaining that the person can apply for a review of the decision within the period of 28 days beginning with the day after the day on which the decision notice is given, and

(e)

explaining that if the person does not seek a review within that period, the penalty notice will be given after the end of that period.

(3)

If a review of the decision is requested in accordance with the penalty decision notice, the penalty may not be imposed until after a review has been carried out.

(4)

If no such review is requested, the penalty may be imposed after the period mentioned in subsection (2)(d).

59Reviews and decisions

(1)

Where a review of the decision that a penalty should be imposed is requested following receipt of a penalty decision notice, the Minister must carry out a review of that decision.

(2)

On a review, the Minister may—

(a)

uphold the decision to impose the penalty and the amount of the penalty,

(b)

uphold the decision to impose the penalty but change its amount, or

(c)

cancel the decision to impose a penalty.

(3)

Where the Minister makes a decision within subsection (2)(a) or (b), the Minister must—

(a)

give the person a notice in accordance with section 60, and

(b)

inform the person of the right of appeal under section 61.

(4)

Where the Minister makes a decision within subsection (2)(c), the Minister must give the person a notice to that effect.

60Penalty notices

(1)

A penalty under section 51 or 54 is imposed by giving a person a notice (a “penalty notice”) requiring the person to pay a penalty of a specified amount to the Minister on or before a specified day.

(2)

A person may not be given more than one penalty notice in respect of the same act or omission.

(3)

Where a person is liable under section 54 to a penalty for a failure to provide information, and the penalty is calculated by reference to a daily rate, the failure to provide information by the end of each day in relation to which the daily rate accrues is to be treated as a separate omission for the purposes of subsection (2).

(4)

In this section, “specified” means specified in the penalty notice.

61Appeals

(1)

A person may appeal against a penalty notice to the appropriate court.

(2)

An appeal may not be brought after the end of—

(a)

the period of 28 days beginning with the day after the day on which the person is given the penalty notice, or

(b)

such longer period (if any) as the appropriate court considers reasonable in all the circumstances.

(3)

On an appeal under subsection (1), the appropriate court may—

(a)

uphold the penalty notice,

(b)

revoke the penalty notice, or

(c)

amend the penalty notice.

(4)

Subsection (5) applies where—

(a)

an appeal is against a penalty notice under section 51 (penalty relating to fraud), and

(b)

court proceedings other than an appeal against a penalty notice have reached a final determination, on at least the balance of probabilities, that the person to whom the notice was given—

(i)

carried out or conspired to carry out, or

(ii)

in a case to which section 52 applies, consented to or connived in the act or omission which constituted,

the fraud to which the penalty relates.

(5)

For the purposes of the appeal against a penalty notice, that final determination is determinative of the question whether the person carried out the fraud.

(6)

The Minister may by regulations make further provision about appeals against a penalty notice.

(7)

The regulations may, among other things, provide for appeals to be heard at the same time as proceedings mentioned in section 10(1)(a) (proceedings to recover a claimed amount).

(8)

Regulations under this section are subject to the negative procedure.

(9)

In this section, “the appropriate court” means—

(a)

the First-tier Tribunal, or

(b)

such other court or tribunal as may be specified in regulations under this section.

62Interest

(1)

An amount payable by a person in accordance with a penalty notice carries interest (“late payment interest”) for each day in the period beginning with the interest start day and ending with the day of payment.

(2)

The interest start day is the day after the specified day included in a penalty notice in accordance with section 60(1).

(3)

The late payment interest rate applicable to a day in the interest period is the percentage per year found by adding 2.5 to the Bank of England rate applicable to the day.

(4)

The Bank of England rate applicable to a day is the official bank rate announced by the Bank of England Monetary Policy Committee at its most recent meeting prior to the day.

(5)

Late payment interest is not payable on late payment interest.

63Code of practice

(1)

The Minister must issue a code of practice about the administration of penalties under section 51, including about the making of decisions about the imposition and amount of a penalty.

(2)

The code of practice must include provision about circumstances in which, and the extent to which, the Minister considers that it would be appropriate to discount the amount of a penalty as a result of cooperative conduct by the person on whom the penalty is imposed.

(3)

The Minister may from time to time revise and reissue the code of practice.

(4)

The Minister must lay the code of practice, or any reissued code of practice, before Parliament.

64Penalties and criminal proceedings or convictions

(1)

The Minister may not give a penalty notice to a person under section 51 in relation to an act or omission which constitutes an offence if the person has, in relation to that act or omission, been found guilty of that offence.

(2)

A person may not be found guilty of an offence in relation to an act or omission if the person has paid a penalty in response to a penalty notice given under section 60 in relation to that act or omission.