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HMRC internal manual

MLR1 Penalties Guidance

Penalties guidance: the MLR Penalty Process: overview: introduction

Before any MLR penalty is calculated, it is essential that the officer has

  • identified a breach of the regulations
  • confirmed that the business has not taken all reasonable steps
  • considered if the business has followed the relevant Treasury approved guidance
  • is satisfied that a penalty is the appropriate method to deal with the non-compliance.

The officer must then identify the exact period when the breach took place. We call this the ‘relevant period’. If a previous warning letter has been issued, this will be from the date of the previous warning letter sent to the business, (advising them of the action they need to take to address the breach) to the date of the following compliance visit (when they find no action has been taken). If a warning letter has not been issued, the ‘relevant period’ will be the period from when the breaches started, to the date when the officer discovered the breaches.

An overview of this process is shown from MLR1PP2210