ECSH82675 - Sanctions for non-compliance: financial penalties: the penalty notice

Once the decision-maker (DM) has identified that the person (P), see ECSH82575 for the definition of a person, has contravened a relevant requirement imposed on them and decided that a financial penalty is the appropriate sanction, in order to impose the penalty the DM must issue a notice to the Person under Regulation 83 Money Laundering Regulations 2017 (MLR 2017). This regulation specifies that the notice must contain:

• HMRC’s decision to impose the penalty
• The reason for imposing the penalty
• The right to review a decision under regulation 94 MLR 2017
• The right to appeal a decision under regulation 99 MLR 2017
• The way and period within which the penalty is to be paid
• Details of the way the penalty may be recovered, if not paid by the date in the notice

The notice will also inform P of our legal requirement to publish details of our decision. For further information, refer to the Publishing Details of the Non-Compliant guidance at ECSH100000.

There is no legal requirement for a pre-penalty letter, informing P of our intention to issue the penalty. There may be some limited circumstance when this is not necessary such as where the risks are very high and immediate action needs to be taken.

Depending on the circumstances of the case, the DM may choose to issue a pre-penalty letter prior to the issue of the penalty notice.

A pre-penalty notice provides the business with an opportunity to challenge the facts on which the proposed penalty is based and/or the calculation of the proposed penalty. It is also an opportunity for the business to provide any additional relevant information to the DM which had not been made available before.

Where the business responds to the pre-penalty notice, the DM must consider any representations and/or information provided and decide whether the penalty will need to be amended.