Dear Reader,
Anti-money laundering registration: a practical warning for regulated businesses
Anti-money laundering supervision is not only a concern for banks, payment firms or large financial institutions. Under the UK Money Laundering Regulations, a range of businesses must be supervised if they carry on relevant activities by way of business. HMRC’s own guidance makes the point directly: every business covered by the regulations must be monitored by a supervisory authority, and businesses not otherwise supervised may need to register with HMRC (https://www.gov.uk/guidance/money-laundering-regulations-who-needs-to-register). The list includes money service businesses, high value dealers, trust or company service providers, accountancy service providers, estate agency businesses, art market participants and letting agency businesses. For art market participants, the threshold is linked to transactions in works of art valued at 10,000 euros or more. For letting agency businesses, the threshold is property or land rented at the equivalent of 10,000 euros or more a month.
At IFS Consultants (www.ifsconsultants.com), for example, we are registered with HMRC for anti-money laundering supervision. HMRC is, in this context, the UK tax authority and the relevant supervisory authority for businesses that fall within its AML remit. That registration is not just an administrative label. It brings with it standards and compliance expectations around customer due diligence, risk assessment, record keeping, internal controls, training and reporting. These obligations exist to reduce the risk that professional services are misused to launder criminal proceeds or finance terrorism.
The practical point is that some businesses may not immediately think of themselves as being in an AML-regulated sector. An accountant or tax adviser may understand the point. A company formation agent may also expect it. But an estate agent, art dealer, high value dealer or letting agent, particularly one operating as a sole trader or small business, may not appreciate that registration could be required. That assumption can be dangerous.
HMRC guidance is clear that a business must not trade without registering where the regulations apply. Trading while unregistered may result in a penalty or prosecution. In some cases, such as money service businesses and trust or company service providers, the business must not trade until HMRC has confirmed that registration has been successful.
A recent First-tier Tribunal case illustrates the point. In Sivarajah [2026] UKFTT 649 (TC) (https://www.iclr.co.uk/document/2026003664/2026ukftt649tc_TNA/html), the taxpayer was a qualified accountant and ACCA member who began providing bookkeeping services on a self-employed basis. He did not hold an ACCA practising certificate. That distinction mattered: membership of a professional body was not enough to make the ACCA his AML supervisor. Because he was not supervised by ACCA for AML purposes, he needed to register with HMRC. He did not do so when he started trading.
Mr Sivarajah had not ignored the issue entirely. He had looked at HMRC guidance and had spoken to other accountants. However, he misunderstood the position, wrongly believing that he did not need to register until turnover exceeded £30,000. He later accepted that this threshold related to a different category of business and did not apply to him. When he realised that his earnings would exceed £30,000, he voluntarily applied to register. HMRC still imposed a penalty for the period during which he had traded unregistered.
The Tribunal dismissed his appeal. The key issue was whether he had taken all reasonable steps and exercised all due diligence to ensure that the registration requirement was complied with. The Tribunal held that this is a high bar. Researching online and speaking to other accountants was not enough where he remained uncertain. He should have taken steps to resolve the uncertainty, including contacting HMRC or ACCA. The fact that contacting HMRC can be difficult did not remove that obligation.
The case is also notable for its discussion of penalties. The penalty was not treated as purely punitive in a narrow personal sense. It had to be effective, proportionate and dissuasive. The Tribunal accepted that the deterrent effect is not limited to the person penalised. It can also be directed at businesses generally, by making clear that non-registration has real consequences.
There are three practical lessons.
First, do not assume that AML supervision is someone else’s problem. If your business falls within one of the relevant sectors, the starting point should be to identify the correct supervisory authority and confirm whether registration is required.
Secondly, membership of a professional body, trade association or regulatory organisation does not automatically mean that you are supervised for AML purposes. The details matter. You may need a practising certificate, specific authorisation or a particular regulated status.
Thirdly, uncertainty must be actively resolved. It is not enough to skim guidance, rely on informal conversations or assume that a threshold applies. If the position is unclear, the prudent course is to check the legislation, HMRC guidance, your professional body’s rules and, where necessary, contact the supervisory authority directly.
AML registration is therefore not a box-ticking exercise. It is a gateway into a compliance regime designed to protect the integrity of the professional and commercial sectors. For businesses in sectors such as accountancy, tax advice, company services, estate agency, art dealing and high-value letting, the safest approach is to treat the issue seriously at the outset. A mistaken assumption may still be a breach, and a well-intentioned business can still face penalties, publication and reputational damage if it trades without the required supervision.
With warm regards,
Dmitry Zapol
Partner, international tax advisor, ADIT (Affiliate)
IFS Consultants, London
(www.ifsconsultants.com, dmitry@ifsconsultants.com)