Citation, commencement and interpretation

1. —(1) This Order may be cited as the Groceries Code Adjudicator (Permitted Maximum Financial Penalty) Order 2015 and comes into force on 6th April 2015.

(2) In this Order “the Act” means the Groceries Code Adjudicator Act 2013.

Financial penalty: permitted maximum amount

2. —(1) For the purposes of section 9 of the Act (investigations: enforcement using financial penalties), the permitted maximum is 1% of the large retailer’s turnover.

(2) For that purpose, a large retailer’s turnover is to be calculated in accordance with articles 3 and 4.

Calculation of turnover

3. —(1) The turnover of a large retailer is the retailer’s applicable turnover for the business year preceding the date of the notice.

(2) Where the business year preceding the date of the notice did not equal twelve months, the turnover is the retailer’s applicable turnover for that business year divided by the number of months in that business year and multiplied by twelve.

(3) Where there was no preceding business year, the turnover is the applicable turnover for the twelve months ending on the last day of the month preceding the month in which the date of the notice falls.

(4) Where in the application of paragraph (3) the large retailer has turnover for a period of less than twelve months, the turnover is the applicable turnover in that period divided by the number of months in that period and multiplied by twelve.

(5) In this article—

“applicable turnover” has the meaning given in article 4;

“business year” means a period of more than six months in respect of which a large retailer published accounts or, if no such accounts were published for the period, prepared accounts; and

“date of the notice” means the date on which the Adjudicator gave written notice to the large retailer under section 9(2) of the Act imposing the penalty in question.

Applicable turnover

4. —(1) For the purposes of article 3, the applicable turnover of a large retailer is the sum of—

(a) all amounts derived by the large retailer from the provision of goods and services falling within the large retailer’s ordinary activities in the United Kingdom; and

(b) all other amounts received by the large retailer in the course of the large retailer’s ordinary activities in the United Kingdom by way of gift, grant, subsidy or membership fee,

after deduction of trade discounts, value added tax and other taxes based on the amounts so derived or received.

(2) Amounts are to be calculated in conformity with generally accepted accounting principles and practices.