ECSH81080 - Sanction administration charges

Regulation 102 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) allows a supervisor to impose charges to meet any reasonable expenses incurred by them in carrying out their functions under the regulations. This allows HMRC, as an MLR supervisor, to recover these expenses, recovering the vast majority   through the supervisory fees it charges supervised businesses. However, HMRC incurs additional costs in addressing non-compliance by businesses. These costs should not be borne by the whole supervised population, therefore an additional charge is passed on to non-compliant businesses. This charge reflects the additional costs of sanctions and is known as the sanction administration charge (SAC). 

Introduction of administration charges by Economic Crime- Supervision (EC-S) 

EC-S introduced the penalty administration charge in July 2018. It was an additional amount charged to a non-compliant business when a financial penalty was imposed. It was intended to make sure those businesses who are compliant do not pay for the cost of HMRC’s supervision of the non-compliant, by linking the charge to the imposition of civil penalties on non-compliant businesses. The amount of the penalty admin charge was calculated with reference to the cost of staff resource involved in processing penalties.

SAC was introduced by EC-S on 1 December 2025 and replaces the previous penalty administration charge regime. The SAC represents the amount of staff resource involved in processing a sanction and is applied to the following sanction types-

  • Financial penalties.
  • Suspension of registration.
  • Cancellation of registration.
  • Prohibitions on management.
  • Censure statements.
  • Injunctions.

Details of the SAC for each type of sanction can be found in the table below:

Type of Sanction

SAC Amount

Comments

Type 1 penalty

£2,000

The SAC will be capped so it does not exceed the value of any financial penalty imposed. 

Type 2 penalty

£2,000

 The SAC will be capped so it does not exceed the value of any financial penalty imposed. 

Type 3 penalty

£350

The SAC for failing to notify HMRC of key changes to a business in line with MLR 2017 regulations 21, 26 or 57.

Type 4 penalty

£350

The SAC for failing to provide information in line with a request made under MLR 2017 regulation 66 and failure to allow access to business premises under MLR 2017 regulation 69.

Cancellation or suspension (administrative or procedural reasons)

£350

Administrative failures will include:

  • Failure to pay fees
  • Failure to pay a penalty
  • Failure to update new or changes to beneficial owners, officers, or managers (BOOM).

Cancellation or suspension

£2,000

Where the decision has involved an intervention, multiple contact or more complex work.

Cancellation following suspension (decision based on same grounds and evidence)

£0

If a SAC was already applied on suspension notice and no further grounds or evidence are added to the cancellation, no additional SAC will be applied.

Cancellation following suspension

£2,000

If following a suspension notice, further grounds and evidence are used to issue a cancellation notice, a further SAC can be applied.

Prohibition on management

£2,000

Prohibition on management are sanctions imposed on the individuals and not the businesses and therefore the SAC will be imposed on the individuals.

Censure statement

£2,000

Censure statements can be imposed on either a business or an individual, so the SAC will be applied to the business or individual as appropriate.

SAC caps on financial penalties

The SAC is capped and cannot exceed the amount of the penalty being imposed. As an example, the SAC for a type 1 penalty is £2,000, so a type 1 penalty of £500 would have a SAC capped at £500. 

Considerations when applying a SAC

  • Where prompt payment of a penalty attracts a discount, the discount only applies to the penalty and not the associated SAC.  For example, a type 2 £5,000 penalty is charged with a £2,000 SAC which is paid within 30 days of issue. The penalty is reduced by 25% leaving a £3,750 penalty due. However, the SAC remains unaffected at £2,000.

  • A SAC is not appealable. However, where a penalty is reduced as a result of an appeal or independent review, the SAC will also need reviewing to ensure the cap has been applied and the SAC reduced as appropriate. For example, a type 1 penalty of £5,000 is imposed with a £2,000 SAC. This receives an independent review which determines the penalty be reduced to £1,000. Therefore, the SAC will also be reduced to £1,000. If a non-financial sanction, such as a censure statement was cancelled, due to a successful challenge, then the SAC would also be cancelled.

  • A SAC is applied when a sanction is being imposed. However, if multiple sanction types are being imposed for the same business, this will affect how the SAC is applied. Please refer to ECSH81085 for further guidance.

  • A SAC will not apply to any case, where a sanction notice was issued to a business before 1st December 2025.