HMRC has released their latest figures for the number of fines issued to Estate Agents (and some Property Sourcers) for Anti-Money Laundering (AML) breaches between April and September last year (2023).
The fines ranged from £1,500 to over £50,000 for some, depending on the seriousness of the breach and how long the business had been trading for. From the full list, there were over 200 businesses facing the wrath of HMRC’s AML Team between April and September last year.
Failing to Register With HMRC For AML Supervision
What’s important to note here, the data shows that the total £1.6 million worth of fines were covered primarily by businesses failing to register, or re-register with HMRC for AML Supervision.
This is a simple, yet critical error in the eyes of HMRC, who are looking at high and medium risk sectors that could be leading the way in organised crime.
An alarming note for the property sourcing sector, is that Estate Agents are currently seen as ‘Medium Risk’ and are being targeted with severe – or even company ending fines.
The Property Sourcing Sector is currently considered ‘High Risk’ due to the number of investor complaints, rogue training, and poor quality of service or compliance in place from a good portion of sourcing agents in the UK. HMRC have grown much more awareness towards are sector and are cracking down – so we are interested to see what the outlook will be for 2024.
Growing Property Sourcing Sector at Risk
According to The Negotiator, HMRC has reported 20,059 estate agents have registered, however the Office of National Statistics has noted there being 24,500 estate agency businesses in the UK right now.
This would make a shortfall of around 4,000 estate agency businesses that are still not registered – and we are confident a portion of those will be property sourcing agents or a branch of the estate agency business will carry out sourcing.
NAPSA is Working With Professional Sourcing Agents to Reduce the Volume of AML Breaches
Through our National Association, we are aiming to raise awareness to not only our Members; also to anyone in the property sourcing sector of the important for anti-money laundering training, understanding and ultimately registration with HMRC each year.
We provide reminders to each of our members, so they can stay up to date themselves, as well as offer discounted training to members through our course provider – Professional Sourcing Compliance (PSC).
If you are sourcing / co-sourcing and have not carried out AML training, we advise that you act on this quickly to complete the short online course (Normally £95 / £71.25 for NAPSA Members) and receive your provable certificate.
“Solicitors Cover AML Due Diligence” – If You Work With Funds, You Must Register With HMRC
We have heard from sourcing agents that the reason they haven’t registered for AML Supervision is due to their solicitor carrying out due diligence.
This is true in part, a solicitor will carry out their own due diligence as they are required to do – however, HMRC expects any business dealing with a property sale or funds to carry out their own checks and be registered for supervision each year.
There are no exceptions to this rule, whether you are sourcing or co-sourcing. You must make sure you are registered – and have the correct compliance in place to start with.
How Do I Register My Sourcing Business?
Before registering, you must make sure you have all of the correct compliance in place for your business. You will have to tick when registering to confirm this, and if you’re selected by HMRC to be spot checked, you will have very limited time to get this together and prove.
If you’re unsure of what you need, you can download our Business Set Up Guide by registering for Free here.
Once you have what you need in place, including Anti-Money Laundering training with a provable certificate, you can register by going to this link: https://www.gov.uk/guidance/register-or-renew-your-money-laundering-supervision-with-hmrc
