VCP11743 - Mitigation Framework: Why and when we should mitigate a penalty: How much mitigation to allow

The aim is to have a fair and appropriate penalty to fit the circumstances of the case and this should be achieved through a process. Firstly the individual mitigating factors must be considered, and secondly the case as a whole should be reviewed.

The mitigation framework should point officers in the right direction, as each factor has a suggested range or amount of mitigation expressed as a percentage, see VCP11745. The range of mitigation suggested is wide enough to allow significant use of discretion and if more than one factor applies they can be combined. Only factors relevant to the case should be taken into account.

In some cases it may be necessary to reduce the amount of mitigation to take account of negative factors, if for example a trader has been obstructive or un-cooperative in someway the mitigation allowed for other factors might be reduced.

It is essential to establish a fair and appropriate penalty to fit the circumstances of each individual case. After using this framework an assessing officer should stand back and look at the mitigation earned and the resulting penalty, and decide if it is appropriate. Is it too low? Is it too high? Is it fair?

All the facts of the case, such as the size and maturity of the business and whether or not a professional advisor is used, should be considered.

Although the law allows us to reduce a penalty to nil, cases where 100% mitigation is appropriate are rare. Where, using the Mitigation Framework, the total amount of mitigation earned amounts to or exceeds 100%, you should consider whether or not it is an appropriate result.

Mitigation is not an exact science and there is no one right answer. We should issue a penalty that we think is suitable, fair and proportionate and we should be able to justify (on appeal if necessary) why a particular amount of mitigation has not been allowed.