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HMRC internal manual

MLR1 Penalties Guidance

Penalties guidance: the MLR Penalty Process: overview: registration penalties

Registration penalties

Because failing to register a business with us at the correct time or failing to update their registration details does not itself give rise to a money laundering risk, a simplified penalty framework for registration breaches has been adopted.

For failure to notify changes in registration details, the starting penalty is the fixed starting penalty of £5000 with no additional penalty, and unless this is a deliberate failure, there is a simplified version of the percentage reductions table to be used for these penalties. These reductions would be applied to the fixed sum of £5000. This simplified table is found at page MLR1PP10150.

The penalties for failure to register with HMRC are fixed sums plus any unpaid fees by the business. If this failure is voluntarily disclosed without any prompting, the fixed sum is £100. If the failure is disclosed after prompting, this sum is £500, with an additional £500 to be considered where further ‘chase up’ action is needed to obtain the registration information.

The penalty for deliberate or continued failure to register while trading is a fixed sum of £1000, that can be reduced to £500 plus unpaid fees for prompt registration. If there is evidence that the business is continuing to trade following a penalty for deliberate refusal to register you should report the case so that prosecution can be considered.