Money Laundering Regulations: Trust or Company Service Provider registration
Find out if you need to register as a Trust or Company Service Provider with HMRC.
You’ll have to register with HM Revenue & Customs (HMRC) under the Money Laundering Regulations if your business is a Trust or Company Service Provider, unless you’re already supervised by another body.
This guide will help you decide if you need to register with HMRC as a Trust or Company Service Provider. It tells you what types of business are covered and what types aren’t, and links to information about how to register if you need to.
HMRC has also published simplified flowcharts that may help you determine if you need to register when you’re an individual acting as a:
Trust or Company Service Providers
A Trust or Company Service Provider is any firm or sole practitioner whose business is to:
- form companies or other legal persons
- act, or arrange for another person to act, as a director or secretary of a company
- act, or arrange for another person to act, as a partner (or in a similar position) for other legal persons
- provide a registered office, business address, correspondence address or administrative address for a company, partnership, or other legal person or arrangement
- act, or arrange for another person to act, as a trustee of an express trust or similar legal arrangement
- act, or arrange for another person to act, as a nominee shareholder for another person, unless the other person is a company listed on a regulated market which is subject to acceptable disclosure requirements
‘Arranging’ for someone to act
Arranging for someone to act in a particular capacity has a narrow meaning. An example would be if you provided a client with a company director, selecting them without further reference back to your client and completing some or all of the formalities to appoint them.
It doesn’t include the normal process of headhunting or advertising to find a suitable candidate for a position that a recruitment agency would carry out.
You only count as a director under the Trust or Company Service Provider rules if:
- you’re formally appointed as a director and your name is registered at Companies House
- you’re a ‘shadow director’ - you direct or control the business but you’re not named as a director
You’re not covered by the rules if you’re just called a director as part of your job title without being formally appointed.
An express trust is an arrangement where there is a clear and expressed intention to create a trust. An express trust is usually created by a written document - a trust deed.
When you need to register as a Trust or Company Service Provider
You’ll have to register with HMRC if your business is a Trust or Company Service. The types of business covered by the Trust or Company Service Provider rules include:
- company formation agents
- providers of registered offices, business addresses, accommodation or correspondence addresses, or mail forwarding services to businesses (other than those run by sole proprietors)
- any individual or firm providing nominee director services, nominee company secretary services or nominee shareholder services - or other similar services
- any individual or firm arranging for another person to act as a director, company secretary, partner or professional trustee (‘arranging’ has the narrow meaning given in the section explaining what a Trust or Company Service Provider is)
- any individual or firm offering professional trustee services (unless they relate to certain low-risk trusts)
- any individual or firm providing their services as nominee shareholder (unless they are acting for a company whose securities are listed on a regulated market)
- any firm providing their services as a company director, company secretary, or partner to another firm (unless the other firm is a member of the same group)
- any individual providing their services as nominee director or nominee company secretary
- any individual providing their services as a company director, company secretary or partner to certain high-risk firms
Nominee services are used to keep the true ownership or control of a company confidential. Nominee directors and secretaries may do little to manage or administer the company, or they may play an active role - but acting on the instructions of others.
Nominee shareholders are the registered holders of the shares in a company but they hold them on behalf of others.
Low-risk trusts include:
- straightforward express trusts set up by a will that create life interests for spouses or partners
- straightforward express trusts set up by a will that are for the benefit of people aged under 25, dependents or people with a disability, or that make provision for a charity
- express lifetime trusts created to manage the affairs of a person with a disability
- occupational pension schemes and employee share schemes
A discretionary trust isn’t a low-risk trust.
A firm is a high-risk firm if it operates:
- in a jurisdiction that has weak anti-money laundering systems
- in a high-risk sector
A firm operates in a high-risk sector if:
- it carries out frequent cash transactions of €15,000 or more
- it is a company operating in the UK but incorporated outside the UK in a jurisdiction that isn’t equivalent to the UK
- some of its share capital is held as unregistered bearer shares
An individual providing their services to a high-risk firm doesn’t have to register with HMRC if that firm is:
- already supervised under the Money Laundering Regulations
- a public authority
- a firm authorised by a public authority to act on their behalf where the only customers are also public authorities
Carrying out an activity ‘by way of business’
In most cases you’ll know whether you’re carrying out a relevant activity by way of business but there may be some circumstances where you might not be sure. You don’t need to consider this any further if you already know that you’re in business.
If you’re unsure, you’ll need to consider if you:
- undertake one or more of the activities of a Trust or Company Service Provider
- advertise or publicise your business activity, or receive referrals from other businesses
- aim to make a profit when you carry out this activity
- carry out the activity with reasonable or recognisable continuity
If you do all of these things then you are carrying out the activity by way of business and you need to register with HMRC.
If you don’t do any of these things then you aren’t carrying out the activity by way of business and you don’t need to register with HMRC.
If you do some but not all of these things, and you’re still not sure, you can contact HMRC by email or in writing for guidance, letting them know which activities do and don’t apply to you.
When you don’t need to register with HMRC as a Trust or Company Service Provider
You don’t have to register with HMRC if you’re:
- an individual employed by a company for which you act as a company director, company secretary or partner, as long as you’re not providing your services to a high-risk firm
- an individual providing company director services, company secretary services or partner services to a firm that is already supervised under the Money Laundering Regulations
- an individual providing company director services, company secretary services or partner services to a public authority or to a firm authorised by a public authority to act on their behalf where the only customers are also public authorities
- a trustee of a low-risk trust
- a recruitment and employment agency that only offers the normal business services of employment agencies in connection with the appointment of a company director, company secretary, partner or professional trustee
- a business that only rents out office premises or grants a right to occupy physical office space
- a will writer
If you provide your services through a personal service company then it’ll only be subject to the regulations if you’d have been subject to them yourself, provided:
- the personal service company supplies only your services
- you own or control at least 50% of the company
- the sole business purpose of the company is to provide your services
Trust or Company Service Providers already registered or supervised elsewhere
You don’t need to register with HMRC under the Money Laundering Regulations if your business is already supervised for money laundering purposes by the Financial Conduct Authority or another supervisory body.
The main supervisory bodies
HMRC is the supervisory authority for Trust or Company Service Providers unless they’re supervised by their own supervisory body. The main supervisory bodies are:
- Financial Conduct Authority
- Association of Chartered Certified Accountants
- Institute of Chartered Accountants of England and Wales
- Institute of Chartered Accountants of Scotland
- Institute of Chartered Accountants in Ireland
- Association of Accounting Technicians
- Association of International Accountants
- Association of Taxation Technicians
- Chartered Institute of Management Accountants
- Chartered Institute of Taxation
- International Association of Bookkeepers
- Institute of Financial Accountants
- Institute of Certified Bookkeepers
- Law Society