Policy paper

HMRC's anti-money laundering (AML) supervision fees: responses and next steps

Updated 12 November 2025

Introduction

The government is committed to enhancing further its response to the threat of money laundering and terrorist financing. 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.

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. The fees, which were last set in May 2019, must be increased to keep up with inflation and meet the costs of providing effective AML supervision.

Summary of responses

On 31 July 2025, HMRC published the information note setting out our intention to increase fees for Anti Money Laundering Supervision. HMRC emailed all supervised businesses (around 37,000 in total) and trade bodies, and also conducted some targeted outreach.

We received 478 responses, representing about 1.5% of our total supervised population (though some responses were by trade bodies).

Whilst some respondents recognised the need for the fee increase, many expressed concerns about the scale of the increase. The largest proportion of responses (40%) was from very small business (mainly Accountancy Service Providers (ASPs)) who were either unaware of the small business fee reduction or, in some cases, were operating at a level that made them ineligible for it.

Respondents made no specific suggestions in relation to the proposed increase in the premises fee, other than that most felt it was too high. However, some Money Service Businesses (MSBs) noted that having a fee model based on the number of premises means that where a premises provides MSB services as an agent for multiple principals and/or on their own behalf (as a principal), each MSB pays the fee for that premises.

A small number of respondents (7%) felt that the increase to the fit and proper fee was too great, especially when combined with the increase in the premises fee.

A very small number of responses (around 1%) expressed concern about the reintroduction of the application fee.

Rationalising and extending the sanctions administration charge for non-compliant businesses was generally welcomed.

Some other points were raised about the need to charge fees at all and the structure of those fees.

The above points and the actions we will take are set out in the following sections. In summary, we have made changes to the supervision fees structure as a result of feedback and are going ahead with the following:

• rather than increase to the fit and proper test fee from £150 to £700 (as set out in the initial proposal), this will instead be raised to £500
• rather than the reintroduced application fee being £400 (as set out in the initial proposal), this will be set at £300 – we will also refund this fee to businesses eligible for the small business fee
• we will increase to the premises fee from £300 to £400, roughly in line with inflation since they were last set (unchanged from the initial proposal)
• we will rationalise the sanctions administration charge to a common set value of £2,000 (unchanged from the initial proposal)

Responses to the discussion document suggested that not all eligible businesses are claiming the Small Business Fee refund. Our further analysis confirmed this, and so we will conduct further outreach and awareness-raising to remind small businesses of this initiative.

Fee structure

The previous information note stressed that 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, explaining why an increase in fees is necessary. It is government policy that supervised businesses should pay for the costs of supervision, rather than this being funded through general taxation.

HMRC is not currently looking to restructure its fees. The points made about the fee structure, will be considered as and when fees are restructured at a future date.

Some respondents, particularly Art Market Participants (AMPs) suggested that there should be a model for businesses which only make occasional transactions above the MLRs threshold. A fundamental principle of the MLRs, in accordance with international standards, is that a business’ AML programme should be risk-based and tailored to the risks faced by an individual business. A business which very rarely transacts above the threshold will still need to comply with the MLRs, but their risk assessment, policies and controls should reflect their risk exposure. This is covered in our guidance (see for example 1.4 of the AMP guidance).

Some suggestions were made about changing the thresholds for transactions covered by the MLRs, for example AMPs asked that the €10,000 threshold is increased. This is outside the remit of this fees discussion, however these points have been passed onto HM Treasury, for consideration as part of broader potential future changes to the MLRs.

Premises fee

The premises registration fee is an approximation for the size of the business and the cost of its supervision. The planned 33% increase in the premises fee is broadly in line with inflation since May 2019.

Most respondents commented on the premises fee. Whilst some saw the need for and supported the increase, many respondents felt the scale of the increase was an unfair additional burden. The most significant segment of responses by volume was from small businesses, mainly ASPs, who were either unaware of the Small Business Fee (SBF) reduction or fell just outside the threshold for the SBF. Following these responses, we have conducted further analysis into the number of supervised businesses likely to be eligible for the SBF reduction compared to the number claiming it. This suggests that less than 50% of eligible businesses are claiming the SBF refund.

We therefore propose to conduct further outreach and awareness-raising to remind small businesses that they may be eligible for the SBF. Details of the SBF and eligibility criteria can be found on GOV.UK. The government recognises the need to protect smaller businesses and, as set out in the previous information note, eligible businesses will face an increase of just £20 (11%) in their annual supervisory fee, from £180 to £200.

Some MSBs noted that the premises-based fee model means that if a high street outlet provides services as an agent of multiple principal MSBs (possibly in addition to providing services as a principal MSB themselves), HMRC receives a fee from each principal MSB for that premises. Some saw this as unnecessary duplication of fees. Agents who operate for multiple principals pose greater risks. They have to be familiar with the risk assessments, systems and controls of multiple principals (meaning non-compliance risks are increased). Furthermore, if an agent is criminally penetrated, that agent may be able to ‘smurf’ payments (meaning to break down larger transactions into smaller chunks) through multiple principals to reduce the risks of detection. MSB agents remain a key area of risk, and one that HMRC is spending more time and resource addressing. Whilst there is some duplication of payments, this reflects the increased risk of such activity. Furthermore, changing the fees structure in this way could favour commercial decisions that increase ML/TF risks.

The premises registration constitutes almost 90% of HMRC supervisory fee income. 94% of HMRC-supervised businesses that operate from a single premises will face an increase in their annual fees of £100 (from £300 to £400), with small businesses facing an increase of just £20 (from £180 to £200). For many businesses, this will be the only supervisory fee that they pay (they won’t pay other HMRC supervisory fees unless there is a significant change to their business). Whilst HMRC recognises that a 33% increase in the premises fee is significant, supervisory fees have not increased since 2019 and the proposed increase is broadly in line with inflation since May 2019: if the fee had increased annually in line with Consumer Price Index (CPI) inflation since 2019, it would now be almost £390. The Bank of England’s inflation calculator suggests inflation from 2019 to July 2025 (the best comparisons available on the tool) suggests that the premises fee would be £387 if it had increased with CPI to July 2025) – and businesses would have had to pay additional costs in the intervening years reflecting those annual increases. HMRC fees also remain broadly comparable with those of other supervisors.

HMRC therefore intends to continue with the planned increases to the premises fee, whilst conducting further awareness-raising to remind small businesses that they may be eligible for the SBF.

Approvals fee

All Beneficial Owners, Officers and Managers (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: it is not an annual fee.

HMRC intends to keep this one-off fee unchanged, at £40.

Fit and proper (F&P) test fee

Fit and proper checks apply only to MSBs and Trust or Company Service Providers (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 role. All BOOMs must pass the test before HMRC will register the business. The first stage of the test involves an approvals check, but this is covered by the F&P fee (MSBs and TCSPs do not pay the approvals fee in addition to the F&P fee). The F&P fee is paid once per BOOM per business. 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 retests BOOMs but does not charge for that retest. The number of F&P retests carried out by HMRC has increased significantly (with 80% more retests in 2024 to 2025 than in 2020 to 2021) as HMRC has responded to risks and evolved its approach to F&P testing. Thus, HMRC is incurring additional costs for F&P tests which are not currently reflected in the fees. Furthermore, supervision of MSBs and TCSPs as the 2 F&P sectors, take up proportionally more supervisory resource and effort, in line with the heightened risks they represent.

HMRC proposed to increase in the F&P fee from £150 to £700 to reflect both the increased supervisory focus on these sectors, commensurate with the higher risks, and the increased costs of retesting applicants which is not covered by the one-off F&P fee.

The proposed increase to the F&P fee was the second most commented on element of the proposed fee increase. Many respondents – including those from sectors who do not pay the fit and proper check fee – felt that the proposed increase was unjustified. HMRC believes that is important that the fee is increased to more accurately reflect the costs of conducting tests and retests and to ensure the costs of supervisory effort is more closely aligned to the fees paid by relevant sectors.

Nevertheless, HMRC has listened to feedback and proposes to reduce the intended increase in the F&P fee by £200 to £500. Any further reduction would undermine the aims of better covering the costs of F&P work, including retests, and ensuring that the increased costs of supervising the 2 F&P sectors is reflected in the fees paid by those sectors.

The impact of the increase in the F&P fee is expected to add £170 to the annual costs for MSBs and £65 for TCSPs on average, based on the number of new BOOMs added to businesses in those sectors in previous years (as opposed than under £270 per year for MSBs and less than £100 a year for TCSPs with the proposed £700 increase).

Application fee

The previous publication noted HMRC’s intention to reintroduce a one-off fee for the first time a business applies to register for AML supervision. This fee represents the additional costs of scrutinising new applications to register (the annual payment of fees and assessment and risking of the refreshed annual supervisory registration form is a more streamlined process, for both HMRC and for supervised businesses). The application fee will also apply to businesses who fail to pay their fees on time and have their registration cancelled as a result. Cancelled registrations cannot be reactivated and these businesses need to reapply for a fresh registration. This incurs HMRC greater cost. Other supervised businesses should not have to fund costs incurred by HMRC by businesses who allow their registration to lapse. The application fee will ensure that these costs are met by the relevant businesses rather than by all supervised businesses.

The reintroduction of this fee therefore aims to reflect the increased costs of processing new applications and change the behaviour of firms who allow their registrations to lapse, acting as a disincentive for doing so and incurring greater costs and burdens to HMRC.

HMRC was conscious that reintroducing this fee could be a potential barrier to entry, particularly when combined with the annual fees we must charge to cover the costs of supervision. Some respondents raised this point in their responses; others felt that a £400 admin charge for businesses who had allowed their registration to lapse by not paying fees was overly punitive.

For the reasons given above, HMRC believe that the reintroduction of this fee is necessary. Nevertheless, HMRC does recognise the potential impacts on prospective start-ups or businesses seeking to enter supervised sectors, especially the smallest businesses.

Therefore, HMRC intends to reintroduce the application fee, setting the fee at £300 (instead of £400) and to waive the fee for businesses eligible for the SBF (who will be able to reclaim the fee along with their SBF refund).

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 greatest 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 and increase the fee from £1,500 to £2,000 (capped so it does not exceed the value of any financial penalty imposed).

Respondents generally favoured this change and HMRC intends to continue with the proposed extension and increasing of the charge. 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

HMRC is grateful to those businesses who commented on the fee proposals, via the dedicated email address or otherwise. HMRC intends to proceed on the basis set out above and will implement the revised fees from 1 December 2025.