MLR1PP15060 - Type 1 penalties using the scale charge framework (compliance breaches): cooperative or uncooperative

The next consideration is the level of cooperation of the business. The more a business tells, helps or gives access to HMRC, the more likely the penalty will be reduced.

To calculate the reduction for cooperation you need to consider two elements:

· giving us reasonable help

· allowing us access to records

Helping includes:

· giving reasonable help in identifying breaches

· positive, proactive assistance as opposed to passive acceptance or obstruction

· actively engaging in the work to accurately identify the breaches of the MLRs the business is liable for

· volunteering any information relevant to the disclosure.

In considering whether a business has given reasonable help, you should always take account of the abilities and circumstances of the business. What is important is the timing, nature and extent of the help the business provides to identify the breaches they are liable for.

The timing relates to how soon the disclosure is made and the period over which the

help is given. As well as there not being any avoidable delays, there should be an active approach, providing information and access to records as early as possible.

The nature covers whether the help is useful and saves HMRC time and effort in identifying breaches. For the business to just appear to be helpful but not actually producing anything of use is not what is required.

The extent of the help covers the whole period of the compliance check from start to finish and all aspects of the compliance check. If help is only received for part of the time or in certain aspects the reduction will not be given.