Firms need to be supervised by the HMRC for AML registration if they carry out activities that are covered by the Money Laundering Regulations and they are not already supervised by another authority, such as the FCA or a professional body.
The activities include:
- Money service businesses not supervised by the FCA;
- High value dealers handling cash payments for goods totalling 10,000 euros or more on a single transaction or linked transactions;
- Trust or company service providers not supervised by the FCA or a professional body;
- Accountancy service providers not supervised by a professional body;
- Estate agency businesses;
- Bill payment service providers not supervised by the FCA;
- Telecommunications, digital and IT payment service providers not supervised by the FCA;
- Art market participants buying or selling of works of art where the transaction value (or a series of linked transactions) is 10,000 euros or more; and
- Letting agency businesses renting property or land valued at the equivalent of 10,000 euros or more a month.
Common Pitfalls and Challenges
When applying for, or maintaining AML registration, firms may face certain pitfalls and challenges. The HMRC will diligently review the firm’s anti-money laundering risk assessment, policies, and procedures to ensure that the firm complies with regulatory requirements and industry best practices. Additionally, the HMRC will expect that the firm has the staff training, appropriate customer due diligence measures, internal controls, and monitoring systems in place.
If the HMRC decides to contact and visit a firm’s business, it does not necessarily mean that there is something wrong, and it is a good opportunity to show how the firm complies with and how senior managers and staff have a robust understanding of the Money Laundering Regulations (MLRs).
HMRC Regulatory action
The HMRC may impose measures, including a financial penalty, if a firm does not comply with the MLRs. In more serious cases, it may consider criminal prosecution.
HMRC’s latest press release in June 2023, shows that £3.2 million in penalties have been issued for anti-money laundering rule breaches. Notably, Xpress Money Services Ltd was fined £1.4 million for failing to carry out risk assessments, not having appropriate anti-money laundering controls, and failing to conduct proper due diligence checks.
Published in March 2023, the Economic Crime plan 2023 to 2026 sets out the Government’s response to economic crime. Through this plan, the UK government is developing an improved end-to-end response to tackling money laundering, ranging from limiting the abuse of UK corporate structures through to the recovery of criminal assets.
Annual Supervision
A firm that is already registered with HMRC, will receive notice 30 days before its annual supervision date as a reminder to sign in to its account to update its registration. Any firm that does not complete its annual supervision within 30 days of that notice, will result in its account automatically expiring meaning that the firm will need to:
- Sign in to reapply;
- Complete a new application; and
- Pay the annual supervision fee.
How Complyport can help
Complyport is approved by HM Revenue and Customs Economic Crime Supervision and Registered as a company service provider for Anti Money Laundering purposes. We offer a range of services to ensure your firm remains protected against financial crime, and compliant with ever evolving legal and regulatory frameworks and can assist with:
- Anti-money laundering reviews and health checks;
- Drafting and implementing relevant policies, procedures and risk assessments;
- Drafting and implementing customer due diligence processes;
- Remediation support on policy and procedural framework, including customer due diligence;
- Providing tailored support when communicating with HMRC warning, investigation or compliance visit; and
- Remediation programmes.
Our specialist team of financial crime consultants have supported many firms with their applications for HMRC supervision, renew their supervision, respond to HMRC enquiries and prepare for HMRC visits. Firms supervised by HMRC that we have supported include estate agents, lettings businesses, trust and company service providers, money services businesses, formation agents and art dealers.
The importance of countering financial crime risks has been highlighted by HMRC, stating that all firms must take steps to defend themselves against financial crime, with effective systems and controls to detect, prevent and deter.
Should you require assistance, complete the form below to schedule a free consultation.
About Complyport
Complyport is a market-leading consulting firm supporting the UK financial services industry for over 22 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.
Complyport can assist with the preparation of a GAP analysis and impact assessment on the investment firm’s capital adequacy and risk management framework of the Company under the regulatory framework.
We specialise in supporting the UK financial services industry with compliance guidance, advice and best practice.
- Compliance managed services and resourcing compliance personnel
- Operational resilience & Cybersecurity advice
- Financial Crime Risk and Compliance support
- Skilled Person Reviews and Regulatory Investigation
- Prudential support, IFPR, ICARA and financial resilience advice
- Consumer Duty implementation advice
- Financial Promotions guidance, support, and management software solutions
- CASS advice and protections of client assets
- Comprehensive compliance work-flow management software
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