MLR1PP11050 - Penalty Guidance: Penalty and pre-penalty notices: Introduction

These notices must be issued on the same basis as warning letters ensuring they are addressed to the correct legal entity following the guidance in MLR1PP6200 

Before the penalty notice, or any penalty, is issued, the business should be given the opportunity to send any comments about the way the penalty is going to be calculated, to the Compliance Officer.

There is no legal requirement to issue a pre-penalty notice so there may be some limited circumstances when this is not necessary. For example a business may have sent a full explanation why it failed to register on time. Because the simplified penalty framework will apply to registration breaches, it should be possible to fully address the points raised in any penalty notice, without issuing a separate pre-penalty notice.

A pre-penalty notice will only be issued when a financial penalty is proposed. Where a breach has been identified but the starting penalty has been reduced to nil, a penalty notice confirming this should be issued as soon as possible after the Compliance Visit. Under these circumstances, any Review or Appeal would only be considering if a penalty notice was appropriate, not the level of the penalty.

Businesses will be given 30 days from the date of the pre-penalty letter to send us any comments before a formal penalty notice is issued. If we receive any comments within this period we will reconsider the penalty.

Comments made in response to a pre-penalty notice are neither a formal Review nor Appeal but the opportunity to point out any areas of disagreement that exist about any liability to a penalty or the way that the penalty has been calculated. This is also an opportunity for the business to present additional details to us which were not available or known at the time of the Compliance Visit. Making comments to us in response to a pre-penalty notice does not remove a business's legal right to a Review of the final penalty or to appeal to the Tribunal Service once a penalty notice has been issued. See MLR1PP11600 for more information about Reviews and Appeals.

This means that comments should be restricted to disagreements about the findings of a Compliance Officer or the way a penalty has been calculated. This pre-penalty notice period is an opportunity for businesses to submit any new information which was not considered at the Compliance Visit, or to replace a determination with accurate figures. For more information about determinations see MLR1PP8520 MLR1PP9050 and MLR1PP930

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