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HMRC internal manual

MLR1 Penalties Guidance

HM Revenue & Customs
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Penalties guidance: MSBs/HVDs: determinations of culpable turnover: methods 3 and 4

Method 3 -Turnover from an earlier accounting period.

When a business is co-operating with us it is highly unlikely that both the current year and previous year Accounts will be unavailable. If however earlier Accounts have to be used as the basis for a determination, in addition to considering any changes in the business that can be identified, the relevant turnover from the accounts which are used should be uplifted to reflect increases in the Retail Price Index.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) MLR1PP14050 

Method 4 - An estimate of average turnover for a similar business.

If previous years Accounts can not be obtained then the final option is to make a determination based on an estimate of the average turnover for a similar business. These statistics should be available to our staff from RIS. When using this information to make a determination, consideration should be given to factors such as the number of employees in the business, the number of sets of premises etc. Where this method is used because of non-cooperation by the business, suspension of the penalty framework should be considered as a more appropriate alternative. See MLR1PP7150