Money Laundering Regulations: who needs to register
Find out if Money Laundering Regulations apply to your business, and what you'll need to know if they do.
Your business needs to be monitored by a supervisory authority if Money Laundering Regulations apply to your business type.
This guide will help you to decide if you need to register with HM Revenue and Customs (HMRC) under Money Laundering Regulations.
Businesses covered by Money Laundering Regulations
The regulations apply to a number of different businesses, including:
- most UK financial and credit businesses such as currency exchange offices, cheque cashers or money transmitters
- independent legal professionals
- accountants, tax advisers, auditors and insolvency practitioners
- estate agency businesses
Business types supervised by HMRC
HMRC is the supervisory authority for:
- Money Service Businesses not supervised by the Financial Conduct Authority (FCA)
- High Value Dealers
- 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
You need to register with HMRC if you carry out activities typically associated with these types of organisations by way of business and you aren’t already registered.
You’re committing an offence if you carry on a business activity that’s covered by the Money Laundering Regulations and you’re not registered with HMRC when you should be.
You may have to pay a penalty if you:
- carry on your business without registering first
- continue to carry on your business after you have de-registered or after HMRC has cancelled your registration
Businesses already supervised for money laundering purposes
You don’t need to register with HMRC for a business covered by the Money Laundering Regulations if you’re already supervised by a designated supervisory authority like the FCA, or by a professional body like the Law Society that acts as a supervisory authority.
The supervisory authorities are:
- Gambling Commission
- Department for Business Innovation & Skills
- Department of Enterprise, Trade and Investment in Northern Ireland
Some designated professional bodies also act as supervisory authorities, these are:
- Association of Accounting Technicians
- Association of Chartered Certified Accountants
- Association of International Accountants
- Association of Taxation Technicians
- Chartered Institute of for Legal Executives
- Chartered Institute of Management Accountants
- Chartered Institute of Taxation
- Council for Licensed Conveyors
- Faculty of Advocates
- Faculty Office of the Archbishop of Canterbury
- General Council of the Bar
- General Council of the Bar of Northern Ireland
- Insolvency Practitioners Association
- Institute of Certified Bookkeepers
- Institute of Chartered Accountants in England and Wales
- Institute of Chartered Accountants in Ireland
- Institute of Chartered Accountants of Scotland
- Institute of Financial Accountants
- International Association of Book-keepers
- Law Society
- Law Society of Scotland
- Law Society of Northern Ireland
Businesses supervised by HMRC that also need to be registered or authorised with the FCA
Money Service Businesses that are required to register with HMRC and carry out money transmission will also need to be registered or authorised with the FCA under the Payment Services Regulations 2009. The contractual agreements between businesses will affect what type of registration they’ll need from HMRC and the FCA respectively.
For instance, both branches and agents of a business must be listed as part of that business’s registration but only agents need to be registered with the FCA under the Payment Services Regulation. Businesses that deal with each other whilst remaining independent of each other must register separately with both HMRC and the FCA.
How your business is registered is a matter for you but your registration with HMRC and the FCA must be consistent and appropriate. You may have agents, some of whom are registered with the FCA as your agents and others as Small Payment Institutions. You must register all such businesses as agents within your FCA registration and all the individual addresses must be listed on your HMRC registration.
You’re responsible for all the activities and anti-money laundering compliance of any premises or agents that are listed under your Money Laundering Regulations registration. This includes, but is not limited to, the provision of training and the application of your businesses policies and procedures.
Some things to consider when deciding how you should register are:
- who the customer enters into a contract with when transmitting money
- if you have a written contract with another business to supply services on their behalf
- who decides the charges and if appropriate any currency exchange rates
- the responsibilities under the contract of both parties
- if a computer system is used to maintain records, the business that supplies it and is responsible for its ongoing maintenance and development
- the name that appears on documents such as order forms, receipts and contracts that are used and issued to customers
- the (payment service) name that appears on the shop sign above the premises
Questioning ‘who does the customer enter into a contract with?’ is very important. Although the agreement with your business partners may show that the customer has a contract with them, what matters is who is responsible to the customer if their money is lost.
Checking that your registrations are correct
HMRC checks for discrepancies between its register and the FCA register.
You should check your details with both HMRC and the FCA to make sure your registrations are correct. If there are any differences you should decide which registration is appropriate and change any registration details that are incorrect.
HMRC cannot tell you how you must register but it may challenge you if they believe your registration is incorrect.
If you have any questions about any of these matters please contact HMRC.
For FCA enquiries contact their Customer Contact Centre.
Carrying out an activity ‘by way of business’
You’ll likely know whether you’re carrying out an activity by way of business, but sometimes it may be difficult to know for sure. You can contact HMRC for further advice if you’re still unsure after you have read the guidance.
Charities and public sector bodies
Money services, accountancy services and trust or company services that are provided by certain charities and public sector bodies aren’t covered by the Money Laundering Regulations. This is because the services aren’t carried out by way of business. You won’t need to register with HMRC if you fall into this category.
The types of charity and public body that don’t have to register are:
- UK registered charities that provide these services free or for a nominal charge
- public authorities that provide these services for members of the public free of charge, or for a fee to cover only the cost of providing the service
- public authorities that provide these services as part of their statutory duties and charge a fee
- public authorities that are funded by the Exchequer or Council Tax payers, and not by the person who receives the service
- public authorities or joint ventures (where 50% or more of the shares are owned by the public body) that provide services only to other public authorities
- public authorities or joint ventures (where 50% or more of the shares are owned by the public body) that provide services to a firm authorised by a public body to act on their behalf - for example a housing association