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

  • Multiply the culpable turnover figure by 20%. This is the additional penalty for MSBs/HVDs

  • 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:

  • This figure is the penalty cap only if it is less than the fixed starting sum of £5000, otherwise the penalty cap is £5000.

  • 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

  • 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