Policy paper

HMRC's anti-money laundering (AML) supervision fees

Updated 1 August 2025

Summary

Subject of this discussion

In this document, HMRC sets out the background information and rationale for the changes it proposes to make to the fees it charges to businesses it supervises under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The primary purpose of this document is to notify businesses of the intended fee changes.

Who should read this

Businesses that are, or should be, registered with HMRC for anti-money laundering supervision.

Duration

The discussion will run from 31 July 2025 to 29 August 2025.

How to take part

You should email HMRC with your comments by 29 August 2025.

After the discussion has been completed

HMRC will review comments after 29 August and publish intended next steps in the following weeks.

Purpose of this discussion document

The government is committed to enhancing further its response to the threat of money laundering and terrorist financing. Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 since the last fee increase, in May 2019, have strengthened the UK regime and placed additional requirements on HMRC and other supervisors. The government is committed to HMRC further strengthening its approach to anti money laundering supervision and taking a robust approach to tackling non-compliance with the regulations.

It is government policy that supervised businesses should pay for the costs of their supervision, rather than this being funded through general taxation. In order to ensure that the fees it charges remain appropriate, HMRC periodically reviews the fees it charges businesses for anti-money laundering (AML) supervision. We are looking to increase the fees that we charge within the current fee structure to meet the costs of providing effective AML supervision. We are not currently looking to restructure the way that we charge fees. We have modelled our proposed fee increase within the existing fee structure whilst treating supervised businesses fairly and keeping fees as simple as possible.

Background

HMRC is one of the UK’s 25 AML supervisors and works to protect the UK against the risk of money laundering and terrorist financing through world class supervision. HMRC supervises more than 36,000 businesses in 9 business sectors:

• Accountancy Service Providers (ASPs) not supervised for AML by a professional body
• Art Market Participants (AMPs)
• Bill Payment Service Providers (BPSPs) not supervised by the Financial Conduct Authority (FCA)
• Estate Agency Businesses (EABs)
• High Value Dealers (HVDs)
• Letting Agency Businesses (LABs)
• Money Service Businesses (MSBs)
• Telecommunications, digital and IT payment service providers not supervised by the FCA (TDITPSPs)
• Trust or Company Service Providers (TCSPs) not supervised for AML by a professional body

Our responsibilities as a supervisor include:

• safeguarding the register and pursuing businesses that should be registered, but are not
• providing education and support to help our customers understand their risks and legal obligations
• carrying out compliance visits and other targeted interventions to ensure businesses have adequate controls in place and are complying with the regulations

The Money Laundering Regulations (MLRs) allow HMRC to charge fees to the businesses it supervises to meet any expenses it reasonably incurs in providing supervision. The total fee income must not exceed those costs.

‘Reasonably incurred’ expenses include the costs of the registration system, approvals and fit and proper (F&P) checks; help, guidance and advice to businesses; supervision and compliance inspections of businesses and the costs of work to address compliance failures; and work undertaken with other supervisors and law enforcement agencies.

The international standard-setting body for combatting money laundering, terrorist financing and proliferation financing, the Financial Action Task Force, carried out an in-depth review of the UK’s approach in 2018 and concluded that “the United Kingdom has a well-developed and robust regime to effectively combat money laundering and terrorist financing. However, it needs to strengthen its supervision”. HMRC has considerably enhanced its approach to supervision since then. Economic crime threats continue to evolve, and in order to continue to evolve and improve its approach to AML supervision and manage money laundering, terrorist financing and proliferation financing risks effectively in the sectors it supervises, HMRC now needs to increase the fees it charges.

Current fee levels

HMRC currently charges the following fees to businesses:

• a £300 premises fee, renewed annually, for every set of premises a business operates from — this fee is due when a complete application is received and on the same date each year after that (a business that is refused registration has this fee refunded)
• a £40 approvals process fee for each beneficial owner, officer or manager (BOOM) of a supervised business — this is required for Accountancy Service Providers, Estate Agency Businesses, Art Market Participants, High Value Dealers, and Letting Agency Businesses (this fee is non-refundable)
• a £150 fit and proper persons test fee for each BOOM of the business — the Money Laundering Regulations only require fit and proper tests to be undertaken for Money Service Businesses and Trust or Company Service Providers (this fee is non-refundable)
• a £1,500 penalty administration charge when we issue a business with a compliance penalty
• a £350 penalty administration charge when we issue a business with a registration, failure to notify, and failure to provide information penalty

The premises registration fee is an approximation for the size of the business and accounted for 90% of HMRC’s fee income in 2023 to 2024.

The fees supervised businesses pay fund a range of different activities, including:

• registering new businesses, and maintaining the integrity of those registers
• carrying out F&P and approvals tests
• carrying out risk assessments and keeping abreast of market developments
• producing guidance to help businesses understand and manage money laundering, terrorist financing and proliferation financing risks in their business, to comply with their legal obligations and to raise standards across the industries HMRC supervises
• undertaking compliance activity such as visits or calls to business — we aim to help businesses stay on the right side of the law and to tackle those with poor systems and controls, working with intelligence and enforcement agencies as appropriate to close down criminal business models

Proposed fee increase

HMRC has looked carefully at supervisory income and costs in previous years, and projected income and costs for 2025 to 2026 and beyond. Fees must increase to enable HMRC to maintain effective supervision. HMRC is looking to retain the current fee structure to keep things simple and provide greater certainty for supervised businesses. HMRC aims to keep the fees charged as low and reasonably possible.

Whilst the current free structure has been retained, HMRC intends to adjust the balance of the fees, placing a greater burden on non-compliant businesses and reflecting where costs are incurred. The proposed changes to the fee levels are:

• premises fee
• approval fee
• F&P test fee
• application fee
• sanctions administration charge

Premises fee

HMRC intends to increase the premises fee from £300 to £400. Costs of providing supervision have increased since 2019 and HMRC needs to continue to evolve its approach to supervision. The planned 33% increase in the premises fee is slightly higher than inflation since May 2019, which is running at 28% — if the fee had increased annually in line with the Consumer Price Index (CPI) since 2019, the premises fee would now be over £385, according to the inflation calculator.

Ninety-four per cent of HMRC-supervised businesses operate from a single premises. These businesses will face an increase in their premises fee of £100, from £300 to £400.

Some businesses may be eligible for a small business fee reduction. HM Government recognises the need to protect smaller businesses in particular from regulatory demands and, in line with this, HMRC intends to increase the fees small businesses pay for supervision by 11%, increasing the small business premises fee from 1 April from £180 to £200 per year.

Approvals fee

All BOOMs in supervised sectors must be subject to an approvals check. The check is to make sure that the applicant, and BOOMs are suitable people to carry out those roles. The approvals check prevents anyone with an unspent conviction for a relevant offence, whether committed in the UK or overseas, being involved in the running of a supervised business or benefiting from it. The approvals fee is paid once per BOOM and HMRC intends to keep this fee unchanged, at £40 for 2025 to 2026.

Fit and Proper (F&P) test fee

F&P checks apply to MSBs and TCSPs due to the heightened risks in those sectors. HMRC must be satisfied that MSBs and TCSPs and their BOOMs are fit and proper to act within a relevant business or sector. The F&P test considers whether the business and its BOOMs are suitable people to undertake specified roles within that business. All BOOMs must pass the test before HMRC will register the business.

The F&P test has 3 parts:

• HMRC will test if an applicant or a BOOM has an unspent conviction for a relevant offence. An applicant or a BOOM that has an unspent conviction that is listed in Schedule 3 of the regulations will automatically fail the fit and proper test
• HMRC will consider whether there has been a consistent failure to comply with the regulations by the business or a BOOM and whether there is a risk that the business may be used for money laundering or terrorist financing
• HMRC will look more widely at:
  • honesty and integrity
  • skills and experience
  • financial soundness, including tax affairs

F&P tests are applicable to a specific person in a specific role. They are not transferrable between roles or businesses but do not time-expire. HMRC does retest applicants, but does not charge for that retest and the cost of the F&P check reflects the cost of initial and subsequent checks. The current fit and proper test fee is not representative of the actual cost of conducting a fit and proper tests. Furthermore, these two sectors take up proportionally more supervisory effort, in line with the heightened risks they represent. The increase in the F&P fee from £150 to £700 reflects the increased risks in these sectors and the costs of testing and retesting applicants.

The impact of the increase in the F&P fee is expected to be less than £270 per year for MSBs and less than £100 a year for TCSPs on average based on the number of new BOOMs added to businesses in those sectors in previous years.

Application fee

HMRC used to charge an additional fee on top of other fees the first time business applied to register for AML supervision. This fee represented the additional costs of scrutinising new applications to register (applying for and processing annual supervisory refreshes is a more streamlined process, for both HMRC and for supervised businesses). This fee was removed in 2019, largely to simplify the fees paid by supervised businesses. Its removal, however, has skewed the fees paid by supervised business meaning that the cost of processing applications to enter the sector is charged at less than full cost.

Whilst the cost of processing applications varies, depending on the size and nature of the business applying to register, in order to keep the annual fee as low as possible and better reflect the additional cost of processing new applications to register, HMRC intends to reintroduce an application fee for newly registered businesses (and businesses who fail to pay their fees on time and have to reapply for registration after their original registration is cancelled). This fee represents the administrative work in getting a new business onto the register, and for the extra work required to collect the payment and bring businesses who allowed their registration to lapse back onto the register.

HMRC intends to reintroduce the application fee, setting the fee at £400. HMRC has chosen to set the fee at this level so it reflects the additional cost of processing new applications to register without being a barrier for new firms to enter the supervised sectors.

Sanctions administration charge

In 2019, HMRC introduced a charge for imposing financial penalties on non-compliant businesses. The core principle of this charge was that compliant businesses should not have to subsidise the costs of supervising the non-compliant. The charge represents an approximation of the additional cost of work associated with imposing sanctions on non-compliant businesses.

Whilst financial penalties remain a significant tool in HMRC’s options for addressing non-compliant businesses, since 2019, HMRC has been making greater use of a wider range of tools, deploying them as appropriate to make the most impact on non-compliant businesses and bring them into compliance or remove them from the supervised sector. The use of such tools also incurs additional cost and HMRC therefore intends to broaden the scope of the penalty administration charge to cover all types of sanctions for non-compliance.

Currently, HMRC differentiates between the different types of financial penalties when imposing a penalty admin fee. This is partly to reflect the difference in the significance of the compliance failings involved. However, the cost of issuing a sanction is broadly similar regardless of the type of penalty, as a similar process is followed. We therefore propose to rationalise, simplify and extend the sanctions administration charge to cover all types of sanctions and be of a common set value of £2,000. The charge will be capped so it does not exceed the value of any financial penalty imposed. 

The sanctions administration fee for failing to notify HMRC of key changes to a business in line with regulations 21, 26 or 57 or failing to provide information in line with a request made under regulation 66 will remain at £350 (or the value of the financial penalty if less than £350).

Next steps

Whilst there are limited options to generate the income needed to continue effective supervision within the current free structure, which cannot be changed at this time, HMRC will consider any responses to this paper. HMRC will publish a brief summary note and set out proposed next steps. It will consider if there is a case for and scope to change the proposals in light of those responses and provide a brief summary note. Subject to this, HMRC aims to apply any fee increase within the next few months.

How to respond

Please email comments by 29 August 2025.

When responding please say if you are a business, individual or representative body. In the case of representative bodies please provide information on the number and nature of people you represent.

Paper copies of this document or copies in Welsh and alternative formats (large print, audio and Braille) may be obtained free of charge from the above address.

Confidentiality

HMRC is committed to protecting the privacy and security of your personal information. This privacy notice describes how we collect and use personal information about you in accordance with data protection law, including the UK GDPR and the Data Protection Act (DPA) 2018.

Information provided as part of this discussion, including personal information, may be published or disclosed in accordance with the access to information regimes. These are primarily the Freedom of Information Act 2000 (FOIA), the DPA 2018, UK GDPR and the Environmental Information Regulations 2004.

If you want the information that you provide to be treated as confidential, please be aware that, under the Freedom of Information Act 2000, there is a statutory Code of Practice with which public authorities must comply and which deals with, amongst other things, obligations of confidence. In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential.

If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on HM Revenue and Customs.

Privacy Notice

This notice sets out how we will use your personal data, and your rights. It is made under Articles 13 and 14 of the UK GDPR.

Your data

We will process this personal data:

• name
• email address
• postal address
• phone number
• job title

Purpose

The purposes for which we are processing your personal data is: Discussion document: HMRC’s anti-money laundering (AML) supervision fees.

Legal basis of processing

The legal basis for processing your personal data is that the processing is necessary for the exercise of a function of a government department.

Recipients

Your personal data will be shared by us with HM Treasury (HMT).

Retention

Your personal data will be kept by us for 6 years and will then be deleted.

Your rights

You have the right to request information about how your personal data are processed, and to request a copy of that personal data.

You have the right to request that any inaccuracies in your personal data are rectified without delay.

You have the right to request that any incomplete personal data are completed, including by means of a supplementary statement.

You have the right to request that your personal data are erased if there is no longer a justification for them to be processed.

You have the right in certain circumstances (for example, where accuracy is contested) to request that the processing of your personal data is restricted.

Complaints

If you consider that your personal data has been misused or mishandled, you may make a complaint to the Information Commissioner, who is an independent regulator. The Information Commissioner can be contacted at:

Information Commissioner’s Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

0303 123 1113 casework@ico.org.uk

Any complaint to the Information Commissioner is without prejudice to your right to seek redress through the courts.

Contact details

The data controller for your personal data is HMRC. The contact details for the data controller are:

HMRC
100 Parliament Street
Westminster
London
SW1A 2BQ

The contact details for HMRC’s Data Protection Officer are:

The Data Protection Officer
HMRC
14 Westfield Avenue
Stratford
London
E20 1HZ

advice.dpa@hmrc.gov.uk