MLR1PP11120 - Penalty Guidance: What to include in a pre-penalty notice: 11-15

Details which should be included 11 to 15:

11. Details of how we arrived at this conclusion. The notice should explain how we identified the behaviour. For example, being negligent by not following the advice in a warning letter. It should also say how many penalty or warning letters we have previously issued.
12. Details of any further reductions we are prepared to allow and the reasons why. The notice should include details of:

• any disclosures that have been made
• if they are full unprompted disclosures, or partial prompted disclosures
• the size of the reductions for disclosure
• if a further reduction for size and gravity is going to be allowed, where appropriate
• the reason for the reduction and size of reduction, where appropriate

13. Summary of the penalty charge. This should state the starting penalty, the total penalty reductions as both an amount and percentage, and the final penalty which is due.
14. Details of any suspended penalty. This should only be included when the business has demonstrated that it is going to take prompt action to correct the breaches. It must:

• clearly explain that an additional 5% of the starting penalty will be suspended.
• show the amount of the penalty total, the amount suspended and the balance to be collected.
• explain that the penalty notice will show the full penalty even if 5% is suspended

To avoid confusion the following wording is recommended;
"The penalty notice will be for £ {insert amount}"
"You will only be sent a demand for £ {insert amount}"
"If we visit you again within 12 months from the date of the penalty notice and you are not compliant you will get a demand for the suspended penalty of £ {insert amount} in addition to any further penalty for continued non-compliance with the Regulations."
"If you become compliant we will cancel the suspended penalty 12 months from the date the penalty notice is issued or following a satisfactory Compliance Visit."

15. Details of the action the business must take to correct the breaches and the underlying failings and weaknesses that lead to the breaches. This must explain what action is now needed by the business in order to become compliant with each of the Regulations, and the timescale for becoming compliant. This should be as detailed as possible because the Compliance Officer who conducts the next Compliance Visit will use this as a reference point to establish if the breaches have been corrected.