MLR1PP15040 - Type 1 penalties using the scale charge framework (compliance breaches): Prompted or unprompted disclosure

For compliance penalties, the next step is to consider whether the disclosure is prompted or unprompted.

• To encourage businesses to be transparent about breaches of the Regulations, where businesses make unprompted disclosures these will attract a 50% reduction to penalty values

• This abatement is given to business who acknowledge their mistakes and disclose these unprompted and is an incentive for businesses to detect, disclose and address compliance failures, moving towards full compliance with the Regulations.

An unprompted disclosure is where a business, entirely proactively and without any contact from HMRC, contacts us to explain a compliance failure and the remedial action taken. A voluntary disclosure discount would not be appropriate if a business were to make such a disclosure after a compliance intervention has been scheduled or started.