Guidance: Who needs to register for money laundering supervision

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 HMRC under the regulations.

Money laundering means exchanging money or assets that were obtained criminally for money or other assets that are ‘clean’. The clean money or assets do not have an obvious link with any criminal activity. Money laundering also includes money that’s used to fund terrorism, however it’s obtained.

You can use the Supervised Business Register to check if another business is registered with HMRC for money laundering supervision.

Businesses covered by the regulations

The regulations apply to a number of different business sectors, including accountants, financial service businesses, estate agents and solicitors.

Every business covered by the regulations must be monitored by a supervisory authority. Your business may already be supervised, for example, because you’re authorised by the Financial Conduct Authority (FCA) or belong to a professional body like the Law Society.

If not, and your business falls into one of 7 business sectors, you’ll need to register with HMRC.

Business sector 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
• bill payment service providers not supervised by the FCA
• telecommunications, digital and IT payment service providers not supervised by the FCA
• art market participants
• letting 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 are not already registered.

You must not trade until your registration has been confirmed successful if your business is a:

• money service
• trust or company service provider

All other businesses can trade whilst their applications are being processed.

You may have to pay a penalty or face prosecution if you:

• carry on your business without registering first
• continue to carry on your business after you have deregistered or after HMRC has cancelled your registration

Businesses already supervised for money laundering purposes

You do not need to register with HMRC if you’re already supervised by the FCA or a professional body, like the Association of Chartered Certified Accountants, that acts as a supervisory authority.

If you’re regulated by the FCA for another purpose, you should contact both them and HMRC to give the details.

Supervisory authorities

The supervisory authorities are:

• HMRC
• FCA
• Gambling Commission

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
• Institute of Accountants and Bookkeepers
• 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

It’s important to consider who the customer enters into a contract with. 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 contact HMRC.

For FCA enquiries contact their Customer Contact Centre.

Carrying out an activity ‘by way of business’

In most cases you’ll 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

Services that are provided by certain charities and public sector bodies aren’t covered by the regulations. This is because the services aren’t carried out by way of business.

The types of charity and public body that do not have to register are:

• UK registered charities that provide these services free or for a nominal charge
• public authorities serving members of the public free of charge, or for a fee to cover the cost of providing the service only
• 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

Carrying out business in the UK

You’ll usually know if you’re carrying out activity in the UK, however, there are some circumstances where it may not be immediately obvious.

You’re carrying out business in the UK if both of the following apply:

• your registered office, or head office if you do not have a registered office, is in the UK
• the day to day management of your business is by the registered or head office or another office maintained by you in the UK

If you carry out business in the UK, you’ll need to register under the regulations in the UK. It does not matter where your customers are located.

Premises to register

You must tell HMRC about your premises when you register for money laundering supervision.

You’ll need to pay fees for each premises where you carry out certain types of business and related activities covered by the Money Laundering Regulations.

This includes:

• offices
• shops and auction houses
• call centres
• cruise ships (in UK territorial waters)
• home address or contact address (if you do not have a business address)
• virtual offices and agent premises

Several outlets at one address

If you run more than one outlet from the same address, such as an airport, you can treat each outlet as a single premises and you’ll only pay one fee. They must all be managed by the business and all staff must be employed by the business. The nominated officer for the business must be responsible for all the outlets.

Premises you do not need to register

You do not need to register any premises that are outside the UK or that you only use for:

• storing your business records
• training employees
• generally managing your employees

If any part of processing transactions takes place there though, such as paperwork being completed, you’ll need to register the premises.

Agents or franchisees

You should register your agent’s or franchisees’ premises if you:

• have an overview of transactions from all your agents or franchisees which they do not have
• are responsible for the way their business is run
• are putting in place the anti-money laundering controls and procedures used when they deal with your customers

You do not have to register your agent’s or franchisees’ premises if you have little control over the:

• way they work
• anti-money laundering controls they put in place

They must then apply to register their premises instead.

You should contact HMRC if you’re not sure which premises to include, or you’re an agent or franchisee wanting to know if you need to register.