HMRC Set to Publicly Identify Non-Compliant Estate Agents Following £1.6m in AML Fines

HM Revenue and Customs (HMRC) is taking a stringent stance against estate agents failing to adhere to anti-money laundering (AML) regulations, having imposed fines totalling over £1.6 million. The agency plans to further escalate its enforcement by publishing a list of non-compliant agencies in the coming weeks.

Escalation of Enforcement Actions
HMRC has issued fines to more than 250 estate agencies, with individual penalties ranging from £1,500 to more than £50,000, depending on the severity of the breaches. These breaches include failures in maintaining essential firm-wide AML documentation, lapses in performing adequate Customer Due Diligence (CDD) within mandated timeframes, and neglecting to assess risks associated with high-value properties, high-risk jurisdictions, and politically exposed persons.

Insights from Industry Experts
Malcolm Driscoll, a leading AML Consultant at FCS Compliance, emphasised the fundamental nature of AML compliance in real estate transactions, which involve significant monetary transfers. Driscoll remarked, “Registering with HMRC is one of the most basic requirements of the Money Laundering Regulations (MLR). However, so many businesses fail to complete this simple obligation, either by ignorance or by believing that the regulations simply do not apply to them.” He compared the necessity of AML obligations in real estate to basic legal requirements for driving, such as obtaining a license and insurance.

Compliance Challenges and Solutions
To avoid punitive actions, Driscoll advises estate agents to develop an accurate AML Policy & Procedures Manual and AML Risk Assessment that reflect their business activities and the specific risks they face. He highlighted the importance of regular staff training and meticulous completion of CDD processes. “These are the things that HMRC are looking at when they conduct their ‘random’ and ‘short notice’ inspections,” Driscoll explained, warning that all agents risk hefty fines if they fail to mitigate these risks effectively.

As HMRC continues to ramp up its inspections, both on-site and with little notice, the upcoming publication of penalised agencies will serve as a clear message to the industry about the importance of compliance with AML regulations.