Anti-money laundering rules
The Money Laundering Regulations (MLR) are designed to protect the UK financial system and put in place certain controls to prevent businesses being used for money laundering by criminals and terrorists.
Many businesses are monitored by the Financial Conduct Authority (FCA) or certain professional bodies. However, businesses that HMRC is responsible for supervising should be aware of the requirement to register with HMRC and the penalties for not doing so.
HMRC is responsible for supervising the following seven business sectors:
- Money Service Businesses (MSBs)
- Trust or Company Service Providers (TCSPs)
- High Value Dealers (HVDs)
- Accountancy Service Providers (ASPs)
- Estate Agency Businesses (EABs)
- Bill payment service providers not supervised by the FCA
- Telecommunications, digital and IT payment service providers not supervised by the FCA
Businesses need to register with HMRC if they carry out activities typically associated with these types of organisations by way of business and are not already registered. A business (listed above) is not allowed to trade without registering with HMRC under the MLR. Trading while not registered is a criminal offence and can result in a penalty or prosecution. Certain businesses supervised by HMRC also need to be registered or authorised with the FCA.
An application to register with HMRC under the MLR can be made online. A non-refundable processing fee of £100 is payable for businesses registering for anti-money laundering supervision for the first time. There is also a premises registration fee for new businesses amounting to £130 for each property. The application will not be reviewed until the fees have been paid. HMRC will then review the application which can take up to 45 days. Additional documentation is also required for certain business types.
Source: HM Revenue & Customs | 18-10-2018