The proposal has been made in a consultation paper inviting comments on the government's proposal for a maximum civil monetary penalty that can be imposed by the information commissioner.
The paper, published on 9 November 2009, says a penalty of up to £500,000 would reflect the importance the government is placing on safeguarding personal data.
It would be the responsibility of the information commissioner to assess an appropriate level of any penalty imposed, as well as publishing guidance about the criteria used and the circumstances that are taken into consideration.
Justice minister Michael Wills said the government was particularly seeking views from data controllers on the level of the proposed penalty, but responses are welcome from anyone with an interest.
"The introduction of civil monetary penalties should contribute to increased compliance with the data protection principles and greater confidence for data subjects that their information is being handled correctly," said Wills.
The consultation will close on 21 December and a paper summarising the responses will be published by 11 January 2010.
