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HMRC internal manual

MLR1 Penalties Guidance

Penalties guidance: calculating a penalty for multiple breaches

The standard method shown at MLR1PP14100 for calculating a penalty for one breach is basically the same method you would employ if there was more than one breach.

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

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) MLR1PP5250

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) MLR1PP6100(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

The standard penalty method may be used where there are several breaches of equal seriousness which took place during the same relevant period, and will also be the most appropriate where there are related breaches within the same group. Related breaches are explained in MLR1PP7300.

There are some circumstances when it may be clearer to calculate a separate penalty for each group of related breaches to arrive at a more effective, proportionate and dissuasive penalty. These will include:

  • when there are distinct and unrelated breaches
  • breaches are systemic or widespread throughout a business or parts of a business
  • more than one breach per customer is prevalent and the breaches are unrelated
  • where the culpable turnover for each breach is distinct
  • when the relevant period is different for each breach

Multiple breaches may indicate significant weaknesses in a business’s ability to carry out its obligations, at both management level, to put in place and ensure compliance with policies and procedures and with staff, to carry out any or an appropriate level of customer due diligence.  This is more likely to increase the risk of a business being exploited by money launderers.