HMRC issued over £1.6M in fines to Estate Agents
HMRC has announced (28 March 2024) that 254 estate agency businesses have been fined a total of over £1.6m for failing to register, or re-register with them for Anti Money Laundering (AML). The fines range from £1,500 to over £50,000.
HMRC have published a follow up list outlining where estate agents have received financial penalties for breaches of the legislation. These will include an absence of firm-wide documentation, incomplete or incorrect Customer Due Diligence (CDD) within the required timeframe and a lack of recognition of specific risks such as the value of property, High Risk Jurisdictions, Politically Exposed Persons (PEP’s), Companies, Trusts and Sanctions.
The 5th Directive - Anti-Money Laundering
As from the 10th January 2020, all letting agents who manage properties which, INDIVIDUALLY, have an income of 10,000 Euros or more per month, must now comply with regulations set out in the 5th Money Laundering Directive.
From May 2020, all letting agents across the UK have 12 months to register with HMRC if they sit within the requirements set out above. Even though the registration portal is not yet available, Customer due diligence (CDD) checks must be carried out new tenants and landlords on or from 10th January 2020. This process will also apply any existing tenancy is renewed after this date, meaning that letting agents will need to carry out CDD checks at that point .