MLR1PP11110 - Penalty Guidance: What to include in a pre-penalty notice: 6-10

Details which should be included 6 to 10:

6. Details of the scale charges (for TCSPs and ASPs). When the additional starting penalty is based on the scale charge of relevant clients and is not clearly subject to the penalty cap, the notice must state the number of relevant clients and the scale charge/additional scale charge for this number. If the penalties have been calculated separately for each breach, then the notice must state the number of relevant clients and scale charge for each breach.
7. Details of how we arrived at this figure. When details of the scale charge and any additional scale charge have been included, a full explanation of how we arrived at the number of relevant clients, and the number of relevant clients subject to each breach, must be included. When the details have been provided by the business and these have been verified by us, this should be explained in the notice. If a determination of the number of relevant customers, or the number subject to the breaches, has been made, full details of the basis for the determination should be included, together with any figures that have been used from an earlier period, and any adjustments that have been made to these figures.
8. Details of the starting penalty before any reductions. This must be clearly explained together with details of whether it is based on 10% of the gross profit in the previous years Accounts (the penalty cap), or the minimum penalty plus the additional penalty where this is less than the penalty cap. If the starting penalty is simply the minimum penalty this should be clearly explained.
9. Details of how we arrived at this figure. When details of both the culpable turnover/scale charge and gross profit have been included, the notice must include a calculation showing both the uncapped and capped starting penalty, and must clearly explain which is being used and why.
10. The reasons for the breaches, the compliance history of the business, and any penalty reductions we are prepared to allow. The notice must explain which behaviour resulted in the breaches, for example, failure to take reasonable steps, deliberate failure. The notice must also say how many penalties have previously been issued, and the total percentage reduction from the penalty reduction matrix, after taking account of these two factors.