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Summary

Subject of this discussion

In this document,聽HMRC聽sets out the background information and rationale for the changes it proposes to make to the fees it charges to businesses it supervises under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The primary purpose of this document is to notify businesses of the intended fee changes.

Who should read this

Businesses that are, or should be, registered with HMRC for anti-money laundering supervision.

Duration

The discussion will run from 31 July 2025 to 29 August 2025.

How to take part

You should email HMRC with your comments by 29 August 2025.

After the discussion has been completed

HMRC will review comments after 29 August and publish intended next steps in the following weeks.

Purpose of this discussion document

The government is committed to enhancing further its response to the threat of money laundering and terrorist financing. Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 since the last fee increase, in May 2019, have strengthened the UK regime and placed additional requirements on聽HMRC聽and other supervisors. The government is committed to聽HMRC聽further strengthening its approach to anti money laundering supervision and taking a robust approach to tackling non-compliance with the regulations.

It is government policy that supervised businesses should pay for the costs of their supervision, rather than this being funded through general taxation. In order to ensure that the fees it charges remain appropriate,聽HMRC聽periodically reviews the fees it charges businesses for anti-money laundering (AML) supervision. We are looking to increase the fees that we charge within the current fee structure to meet the costs of providing effective聽AML聽supervision. We are not currently looking to restructure the way that we charge fees. We have modelled our proposed fee increase within the existing fee structure whilst treating supervised businesses fairly and keeping fees as simple as possible.

Background

HMRC聽is one of the UK鈥檚 25聽AML聽supervisors and works to protect the UK against the risk of money laundering and terrorist financing through world class supervision.聽HMRC听蝉耻辫别谤惫颈蝉别蝉 more than 36,000 businesses in 9 business sectors:

• Accountancy Service Providers (ASPs) not supervised for聽AML聽by a professional body
• Art Market Participants (AMPs)
• Bill Payment Service Providers (BPSPs) not supervised by the Financial Conduct Authority (FCA)
• Estate Agency Businesses (EABs)
• High Value Dealers (HVDs)
• Letting Agency Businesses (LABs)
• Money Service Businesses (MSBs)
• Telecommunications, digital and IT payment service providers not supervised by the聽FCA听(TDITPSPs)
• Trust or Company Service Providers (TCSPs) not supervised for聽AML聽by a professional body

Our responsibilities as a supervisor include:

• safeguarding the register and pursuing businesses that should be registered, but are not
• providing education and support to help our customers understand their risks and legal obligations
• carrying out compliance visits and other targeted interventions to ensure businesses have adequate controls in place and are complying with the regulations

The Money Laundering Regulations (MLRs) allow聽HMRC聽to charge fees to the businesses it supervises to meet any expenses it reasonably incurs in providing supervision. The total fee income must not exceed those costs.

鈥楻easonably incurred鈥� expenses include the costs of the registration system, approvals and fit and proper (F&P) checks; help, guidance and advice to businesses; supervision and compliance inspections of businesses and the costs of work to address compliance failures; and work undertaken with other supervisors and law enforcement agencies.

The international standard-setting body for combatting money laundering, terrorist financing and proliferation financing, the Financial Action Task Force, carried out an聽聽of the UK鈥檚 approach in 2018 and concluded that 鈥渢he United Kingdom has a well-developed and robust regime to effectively combat money laundering and terrorist financing. However, it needs to strengthen its supervision鈥�.聽HMRC聽has considerably enhanced its approach to supervision since then. Economic crime threats continue to evolve, and in order to continue to evolve and improve its approach to聽AML聽supervision and manage money laundering,聽terrorist financing听补苍诲听proliferation financing聽risks effectively in the sectors it supervises,聽HMRC聽now needs to increase the fees it charges.

Current fee levels

HMRC聽currently charges the following fees to businesses:

• a 拢300 premises fee, renewed annually, for every set of premises a business operates from 鈥� this fee is due when a complete application is received and on the same date each year after that (a business that is refused registration has this fee refunded)
• a 拢40 approvals process fee for each beneficial owner, officer or manager (BOOM) of a supervised business 鈥� this is required for Accountancy Service Providers, Estate Agency Businesses, Art Market Participants, High Value Dealers, and Letting Agency Businesses (this fee is non-refundable)
• a 拢150 fit and proper persons test fee for each聽BOOM聽of the business聽鈥� the Money Laundering Regulations only require fit and proper tests to be undertaken for Money Service Businesses and Trust or Company Service Providers (this fee is non-refundable)
• a 拢1,500 penalty administration charge when we issue a business with a compliance penalty
• a 拢350 penalty administration charge when we issue a business with a registration, failure to notify, and failure to provide information penalty

The premises registration fee is an approximation for the size of the business and accounted for 90% of聽HMRC鈥檚 fee income in 2023 to 2024.

The fees supervised businesses pay fund a range of different activities, including:

• registering new businesses, and maintaining the integrity of those registers
• carrying out聽F&P聽and approvals tests
• carrying out risk assessments and keeping abreast of market developments
• producing guidance to help businesses understand and manage money laundering, terrorist financing听补苍诲听proliferation financing聽risks in their business, to comply with their legal obligations and to raise standards across the industries聽HMRC听蝉耻辫别谤惫颈蝉别蝉
• undertaking compliance activity such as visits or calls to business 鈥� we aim to help businesses stay on the right side of the law and to tackle those with poor systems and controls, working with intelligence and enforcement agencies as appropriate to close down criminal business models

Proposed fee increase

HMRC聽has looked carefully at supervisory income and costs in previous years, and projected income and costs for 2025 to 2026 and beyond. Fees must increase to enable聽HMRC聽to maintain effective supervision.聽HMRC聽is looking to retain the current fee structure to keep things simple and provide greater certainty for supervised businesses.聽HMRC聽aims to keep the fees charged as low and reasonably possible.

Whilst the current free structure has been retained,聽HMRC聽intends to adjust the balance of the fees, placing a greater burden on non-compliant businesses and reflecting where costs are incurred. The proposed changes to the fee levels are:

• premises fee
• approval fee
• F&P test fee
• application fee
• sanctions administration charge

Premises fee

HMRC聽intends to increase the premises fee from 拢300 to 拢400. Costs of providing supervision have increased since 2019 and聽HMRC聽needs to continue to evolve its approach to supervision. The planned 33% increase in the premises fee is slightly higher than inflation since May 2019, which is running at 28% 鈥� if the fee had increased annually in line with the Consumer Price Index (CPI) since 2019, the premises fee would now be聽.

Ninety-four per cent of聽HMRC-supervised businesses operate from a single premises. These businesses will face an increase in their premises fee of 拢100, from 拢300 to 拢400.

Some businesses may be eligible for a聽small business fee reduction. HM Government recognises the need to protect smaller businesses in particular from regulatory demands and, in line with this,聽HMRC聽intends to increase the fees small businesses pay for supervision by 11%, increasing the small business premises fee from 1 April from 拢180 to 拢200 per year.

Approvals fee

All BOOMs in supervised sectors must be subject to an聽approvals check. The check is to make sure that the applicant, and BOOMs are suitable people to carry out those roles. The approvals check prevents anyone with an unspent conviction for a relevant offence, whether committed in the UK or overseas, being involved in the running of a supervised business or benefiting from it. The approvals fee is paid once per聽BOOM听补苍诲听HMRC聽intends to keep this fee unchanged, at 拢40 for 2025 to 2026.

Fit and Proper (F&P) test fee

F&P聽checks apply to聽MSBs听补苍诲听TCSPs聽due to the heightened risks in those sectors.聽HMRC聽must be satisfied that聽MSBs听补苍诲听TCSPs聽and their BOOMs are fit and proper to act within a relevant business or sector. 罢丑别听F&P聽test considers whether the business and its BOOMs are suitable people to undertake specified roles within that business.聽All BOOMs聽must pass the test before聽HMRC聽will register the business.

罢丑别听F&P聽test has 3 parts:

• HMRC聽will test if an applicant or a聽BOOM聽has an unspent conviction for a relevant offence. An applicant or a聽BOOM聽that has an unspent conviction that is listed in Schedule 3 of the regulations will automatically fail the fit and proper test
• HMRC聽will consider whether there has been a consistent failure to comply with the regulations by the business or a聽BOOM聽and whether there is a risk that the business may be used for money laundering or terrorist financing
• HMRC聽will look more widely at:
  • honesty and integrity
  • skills and experience
  • financial soundness, including tax affairs

F&P聽tests are applicable to a specific person in a specific role. They are not transferrable between roles or businesses but do not time-expire.聽HMRC聽does retest applicants, but does not charge for that retest and the cost of the聽F&P聽check reflects the cost of initial and subsequent checks. The current fit and proper test fee is not representative of the actual cost of conducting a fit and proper tests. Furthermore, these two sectors take up proportionally more supervisory effort, in line with the heightened risks they represent. The increase in the聽F&P聽fee from 拢150 to 拢700 reflects the increased risks in these sectors and the costs of testing and retesting applicants.

The impact of the increase in the聽F&P聽fee is expected to be less than 拢270 per year for聽MSBs聽and less than 拢100 a year for聽TCSPs聽on average based on the number of new BOOMs added to businesses in those sectors in previous years.

Application fee

HMRC聽used to charge an additional fee on top of other fees the first time business applied to register for聽AML聽supervision. This fee represented the additional costs of scrutinising new applications to register (applying for and processing annual supervisory refreshes is a more streamlined process, for both聽HMRC聽and for supervised businesses). This fee was removed in 2019, largely to simplify the fees paid by supervised businesses. Its removal, however, has skewed the fees paid by supervised business meaning that the cost of processing applications to enter the sector is charged at less than full cost.

Whilst the cost of processing applications varies, depending on the size and nature of the business applying to register, in order to keep the annual fee as low as possible and better reflect the additional cost of processing new applications to register,聽HMRC聽intends to reintroduce an application fee for newly registered businesses (and businesses who fail to pay their fees on time and have to reapply for registration after their original registration is cancelled). This fee represents the administrative work in getting a new business onto the register, and for the extra work required to collect the payment and bring businesses who allowed their registration to lapse back onto the register.

HMRC聽intends to reintroduce the application fee, setting the fee at 拢400.聽HMRC聽has chosen to set the fee at this level so it reflects the additional cost of processing new applications to register without being a barrier for new firms to enter the supervised sectors.

Sanctions administration charge

In 2019,聽HMRC聽introduced a charge for imposing financial penalties on non-compliant businesses. The core principle of this charge was that compliant businesses should not have to subsidise the costs of supervising the non-compliant. The charge represents an approximation of the additional cost of work associated with imposing sanctions on non-compliant businesses.

Whilst financial penalties remain a significant tool in聽HMRC鈥檚 options for addressing non-compliant businesses, since 2019,聽HMRC聽has been making greater use of a wider range of tools, deploying them as appropriate to make the most impact on non-compliant businesses and bring them into compliance or remove them from the supervised sector. The use of such tools also incurs additional cost and聽HMRC聽therefore intends to broaden the scope of the penalty administration charge to cover all types of sanctions for non-compliance.

颁耻谤谤别苍迟濒测,听HMRC聽differentiates between the different types of financial penalties when imposing a penalty admin fee. This is partly to reflect the difference in the significance of the compliance failings involved. However, the cost of issuing a sanction is broadly similar regardless of the type of penalty, as a similar process is followed. We therefore propose to rationalise, simplify and extend the sanctions administration charge to cover all types of sanctions and be of a common set value of 拢2,000. The charge will be capped so it does not exceed the value of any financial penalty imposed.聽

The sanctions administration fee for failing to notify聽HMRC聽of key changes to a business in line with regulations 21, 26 or 57 or failing to provide information in line with a request made under regulation 66 will remain at 拢350 (or the value of the financial penalty if less than 拢350).

Next steps

Whilst there are limited options to generate the income needed to continue effective supervision within the current free structure, which cannot be changed at this time,聽HMRC聽will consider any responses to this paper.聽HMRC聽will publish a brief summary note and set out proposed next steps. It聽will consider if there is a case for and scope to change the proposals in light of those responses and provide a brief summary note.聽Subject to this, HMRC聽aims to apply any fee increase within the next few months.

How to respond

Please email comments by 29 August 2025.

When responding please say if you are a business, individual or representative body. In the case of representative bodies please provide information on the number and nature of people you represent.

Paper copies of this document or copies in Welsh and alternative formats (large print, audio and Braille) may be obtained free of charge from the above address.

Confidentiality

HMRC聽is committed to protecting the privacy and security of your personal information. This privacy notice describes how we collect and use personal information about you in accordance with data protection law, including the UK GDPR and the Data Protection Act (DPA) 2018.

Information provided as part of this discussion, including personal information, may be published or disclosed in accordance with the access to information regimes. These are primarily the Freedom of Information Act 2000 (FOIA), the DPA 2018, UK GDPR and the Environmental Information Regulations 2004.

If you want the information that you provide to be treated as confidential, please be aware that, under the Freedom of Information Act 2000, there is a statutory Code of Practice with which public authorities must comply and which deals with, amongst other things, obligations of confidence. In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential.

If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on HM Revenue and Customs.

Privacy Notice

This notice sets out how we will use your personal data, and your rights. It is made under Articles 13 and 14 of the UK GDPR.

Your data

We will process this personal data:

• name
• email address
• postal address
• phone number
• job title

Purpose

The purposes for which we are processing your personal data is: Discussion document:聽HMRC鈥檚 anti-money laundering (AML) supervision fees.

Legal basis of processing

The legal basis for processing your personal data is that the processing is necessary for the exercise of a function of a government department.

Recipients

Your personal data will be shared by us with HM Treasury (HMT).

Retention

Your personal data will be kept by us for 6 years and will then be deleted.

Your rights

You have the right to request information about how your personal data are processed, and to request a copy of that personal data.

You have the right to request that any inaccuracies in your personal data are rectified without delay.

You have the right to request that any incomplete personal data are completed, including by means of a supplementary statement.

You have the right to request that your personal data are erased if there is no longer a justification for them to be processed.

You have the right in certain circumstances (for example, where accuracy is contested) to request that the processing of your personal data is restricted.

Complaints

If you consider that your personal data has been misused or mishandled, you may make a complaint to the Information Commissioner, who is an independent regulator. The Information Commissioner can be contacted at:

Information Commissioner鈥檚 Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

0303 123 1113聽casework@ico.org.uk

Any complaint to the Information Commissioner is without prejudice to your right to seek redress through the courts.

Contact details

The data controller for your personal data is聽HMRC. The contact details for the data controller are:

HMRC
100 Parliament Street
Westminster
London
SW1A 2BQ

The contact details for聽HMRC鈥檚 Data Protection Officer are:

The Data Protection Officer
HMRC
14 Westfield Avenue
Stratford
London
E20 1HZ

advice.dpa@hmrc.gov.uk