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HMRC internal manual

MLR1 Penalties Guidance

From
HM Revenue & Customs
Updated
, see all updates

Penalties guidance: Text version of flowchart of how to issue penalties

Flowchart: How to issue penalties

Text version

  • Identify breach of the regulations
  • If the breach is persistent or serious, with money laundering/terrorist financing implications, consider the appropriate action needed to deal with this
  • If the business is an MSB/TCSP, consider withdrawal of F&P status of business owners and also consider whether the breach warrants referral to Criminal Investigation

If either of these are appropriate, draft report and submit to line manager for submission to:-

* (a) Registration for withdrawal of F&P
* (b) Criminal investigation for potential prosecution
  • If the breach is minor, with no money laundering/terrorist financing implications, and a penalty is not appropriate, consider if a warning letter is appropriate

    • If you do issue a warning letter you should also send out a table of failures. See MLR1PP6100 for guidance
    • If you have issued a warning letter, check if the changes have been made so addressing the breach
    • If they have been made, no further action is needed at this stage
    • If no changes have been made go straight to calculating the penalty.
  • If a penalty is appropriate, see calculation process at MLR1PP14100 (Word 129KB) 
  • When issuing the penalty, if a Pre-penalty notice is appropriate (See MLR1PP11050) send draft Pre-Penalty Notice with penalty calculation and table of failures to Counter Signatory Officer (CSO) for authorisation
  • If authorisation received from CSO issue Pre Penalty Notice to business with penalty calculation and table of failures and B/F 30 days
  • If authorisation not received from CSO cancel all penalty action and take alternative action as specified by CSO
  • If the business replies to the Pre Penalty Notice consider their response and decide if the penalty should be reduced or cancelled.
  • If you believe there are grounds to reduce or cancel the penalty carry out a revised penalty calculation and table of failures if applicable
  • After 30 days complete Penalty Notice and Input Form and send it to the CSO for authorisation
  • If the CSO does not authorise a penalty notice (or revised penalty notice) and does not complete their part of the Input form, cancel all penalty action and take alternative action as specified by the CSO
  • If the CSO does authorise the penalty notice (or revised penalty notice) and does complete their part of the Input form, issue Penalty Notice, penalty calculation and table of failures to business. Send Input Form to Registration Team. B/F 30 days