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What Is Money Laundering?

Going by its dictionary and legal definition, money laundering is nothing but a method through which one conceals the origin of money that have been obtained illegally by making the currency go through series of banking transfers or commercial transactions. In simple words, money laundering is the process adopted by the individual or by a group of people by which the dirty money or black money is made to look clean or legitimate. UK government has always kept a very stern approach when it comes to money laundering and the normal punishment for principal money laundering offences carry a penalty of 14 years of imprisonment.

In the United Kingdom, the money laundering is governed and regulated by The Proceeds of Crime Act 2002 and as per the act; it criminalizes the use of any property that is not obtained through legitimate ways. The criminal property could be anything including money, shares or property. Examples of a criminal conduct are proceeds of tax evasion, the receipt of a bribe etc and the government has made it mandatory for all the businesses to be regulated by the Money Laundering Regulations and in case your business is not regulated by the same, then you must inform the HMRC to report any suspicious activity related to money laundering. The main reason behind the introduction of Money Laundering Regulations was to prevent and detect any crime, apart from protecting the country’s financial system and the regulations are applicable to the nearly all the business sectors, including:

  • Financial and credit businesses
  • Independent legal professionals
  • Estate agents
  • Casinos
  • Tax advisers, auditors, insolvency practitioners and accountants.

Fees You Will Pay To Register For Money Laundering Supervision

UK government is very clear about its stand when it comes to money laundering and in order to stand true to its take on the same, it has recently introduced a new government body by the name of The Office For Professional Body Anti-Money Laundering Supervision, and will work with nearly all the money laundering supervisors in order to help improve the standards of the money laundering law in the country. The new body will also be directly supervising the 22 accountancy and legal professional body registered in the country. With the introduction of the new body, i.e. OPBAS, the UK government wants to give a clear message to the criminals and terrorists on the clear and stern stand of the country as total.

Also Read: Taxation payments to HMRC

Money Laundering Regulations by HMRC

The Her Majesty’s Revenue and Customs is the governing and supervisory body for Money Laundering Regulations and in order to ensure that you are well within the law, it is important for you to check if you need to register your business with the HMRC for availing its money laundering supervision. If you carry out the activities as mentioned below and are not already registered for the money laundering supervision with the government approved bodies, then you must register for the HMRC money laundering supervision:

  1. If you are into money service businesses that are not supervised by the Financial Conduct Authority (FCA)
  2. If you are bill payment service providers not supervised by the Financial Conduct Authority (FCA)
  3. If you have estate agency businesses
  4. If you are accountancy service providers not supervised by Financial Conduct Authority (FCA) or any other professional body
  5. If you are high value dealers
  6. If you are trust or company service providers and have not registered with the FCA or a professional body

Also Read: Financial Reporting Standard

If you are carrying out the above mentioned activities and businesses and are not registered with the HMRC, then you can use their online service for the following:

  • To apply and register for the anti-money laundering supervision: When you apply for the HMRC money laundering supervision, then you are required to provide the following information:
    • You will be asked to tell about your premises i.e. the type of activities or business you carry out.
    • Once you have selected your premises from the list give, you have to pay the applicable fees in order to avail the money laundering supervision. If you have not paid the fees, then your application will not be reviewed until you do so.
  • To renew your registration, if it has been expired: It is important to keep an eye on when your application is due for renewal.
  • To manage your account: You can login to the HMRC website in order to manage your account.

Fees You Will Pay For Money Laundering Supervision

As mentioned above, for you to avail the HMRC money laundering supervision, you pay the applicable fees, which include the following:

  • One time application charge: If you are applying for the money laundering supervision for the first time, then you have to pay fees of £100, which is non-refundable. In case you have already been registered but your registration has been expired, then you can renew the same by paying the fees of £100, which is again a non-refundable one.
  • If you have more than one businesses or premises, then you have to pay registration fees for each premises: As per the Money Laundering Regulations of the HMRC, you have to pay a non-refundable fees of £130, for every sector or premises you include in your application form. The fees for each premises in undergoing revision and will be increased to £300 with effect 1st May 2019. Fees for each premises is a refundable one and will be refunded by the HMRC under following circumstances:

    • If you haven’t filled all the details mentioned in the online application form
    • If you have failed the fit and proper test conducted by the HMRC

    Once you have filled the form with the applicable sectors, but later on wanted to add one or more premises to your application, then you will have to pay the applicable fees in full if you are adding the premises in the first 6 months of the year; however, if you are adding the premises in the second half of the year, then you have to pay only half of the applicable fees for each premises. In case you want to delete one or more premises from your application form, you can do so; however no fees will be refunded for the same.

  • A fit and proper test fees for money in case of accountancy service providers, estate agency businesses or high value dealers for each person tested: Like it is the case with the one time registration, there is a fees attached with the fit and proper test for money in case of certain business sectors. For each person tested, you have to pay non-refundable fees of £100, which will be increased to £150 from 1st May 2019.
  • An approval process fee in case of accountancy service providers, estate agency businesses or high value dealers for each person tested: In case of business sector such as estate agency business or high value dealer or accountancy service provider, it is important to undergo an approval test by the HRMC to see if the employees are free from any criminal convictions and in order to apply for the same, you have to pay a non-refundable fees of £40 for each person tested.
  • For the small businesses i.e. with a turnover below £5,000, you can apply to the HMRC for providing a small business reduction and you can do so by writing an email to the HMRC with the following subject line and body:
    • You have to write an email at AMLS.Fees@hmrc.gov.uk
    • Subject line: Turnover Reduction
    • Body of the email:

      i. Mention your anti money laundering registration number

      ii. If you have been trading for more than12 months, then mention your previous year’s turnover

      iii. If you have started a new business, then mention the anticipated turnover for the year.

As mentioned above, in order to register for the money laundering supervision service of the HMRC, it is important for you to pay the applicable fees both at the time of your first application and also at the time of renewal of your application. HMRC online system is quite easy and user friendly to be followed by anyone and everyone and it has been designed in the simplest way possible. Once you have filled in all the details of your business, it will automatically work how much you have to pay to the HMRC. When you submit your form for application or renewal, you will get a 14 digit payment reference number starting from X, which you have to remember while making the applicable fees. You have the option of making the payment by using a debit card or credit card, or CHAPS or BACS by using the following details:

  • Sort Code: 08 32 10
  • Payment reference number: 14 digit number starting from X
  • Account number: 12001020
  • Account Name: HMRC Shipley Receipts

In order to make sure that your payment gets processed fast, it is important that you enter all the details correctly and run through the details before submitting the form.

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