MLR1PP14810 - Penalties guidance: text version of flowchart of how to calculate compliance penalties
Flowchart; How to calculate a compliance penalty
Text Version
- The fixed starting penalty is £5000
- Calculate the Additional penalty:
If the business is an ASP/TCSP/EAB:
- Work out the number of relevant clients in the period of the breach
- See the Scale Charge table at MLR1PP9000 to find the relevant scale charge for the number of relevant clients. This is the additional penalty for ASPs/TCSPs/EABs.
If the business is an MSB/HVD:
- Calculate the culpable turnover of the business
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Multiply the culpable turnover figure by 20%. This is the additional penalty for MSBs/HVDs
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Calculate the penalty cap:
- Find out the gross profit of the business
- Multiply the gross profit by 10% to give the penalty cap
If the business is an ASP/TCSP/EAB:
- This figure is the penalty cap
If the business is an MSB/HVD:
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This figure is the penalty cap only if it is less than the fixed starting sum of £5000, otherwise the penalty cap is £5000.
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Calculate the maximum penalty:
- Add the Additional penalty to the fixed starting penalty (£5000) to give a total starting penalty figure
- Consider if the penalty cap is greater than the total starting figure
- If the penalty cap is greater, take the total starting figure as the maximum penalty
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If the penalty cap is lower, take the penalty cap figure as the maximum penalty
- Take this maximum penalty figure and see if it is appropriate to apply a reduction percentage to this figure:
- If a reduction is appropriate see table at MLR1PP10100 and apply the relevant reduction to the maximum figure to arrive at the final penalty figure.
- If a reduction is not appropriate, the maximum figure is the final penalty figure