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HMRC internal manual

MLR1 Penalties Guidance

Penalties Guidance: the MLR Penalty Process: overview: Compliance Penalties Part 3

Once the maximum penalty has been calculated, officers can then reduce this sum by looking at the breaches themselves and what led to them. They can apply reductions based on the behaviour of the business, including their compliance history, and whether the business disclosed the breaches to HMRC without being prompted. There is a table of percentage reductions, which range from 20% to 70%, which officers must follow, both for consistency purposes and to make sure the penalty is appropriate. This table can be found at chapter MLR1PP10100 

When this reduction has been applied to the maximum penalty figure, where appropriate, this provides the final penalty figure.