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HMRC internal manual

MLR1 Penalties Guidance

From
HM Revenue & Customs
Updated
, see all updates

Penalty guidance: penalty and pre-penalty notices: continued

In practice, before a penalty is issued any comments that have been made about the following should be carefully considered:

  • any mistakes that have been made in the penalty calculation
  • that a breach of a specific Regulation has occurred
  • the relevant period
  • the gross profit
  • the number of relevant clients subject to the breach for TCSPs/ASPs/EABs
  • the culpable turnover for MSBs and HVDs
  • the number of penalty notices previously issued to the business
  • the behaviours demonstrated by the business
  • any figures which are provided by the business intended to substitute a determination provided there is supporting evidence
  • the basis for a determination
  • any reasonable excuse that was not identified at the Compliance Visit or evidence which was previously not provided to support a reasonable excuse

If any comments are rejected, the Compliance Officer may need to be able to justify this decision before a tribunal. This in practice will mean that the business has not been able to provide evidence, which on a balance of probabilities, would have changed their original decision.

Any decision about whether sufficient evidence has been supplied to support the comments made by a business, should be based on the same criteria that an Officer would use at a Compliance Visit. When any comments are accepted, this should be clearly explained in the penalty notice, and the penalty adjusted to show these changes. When they are rejected, this decision and the reasons why, should also be explained in the penalty notice. It may be possible to obtain any missing details by telephone. There may also be some circumstances where a second visit to the business is needed to verify the details.

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