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HMRC’s Guidance and Internal Manual
HMRC’s Guidance and Internal Manual
Registering and renewal
HMRC’s guidance, “Register or renew your money laundering supervision with HMRC” which was in force as at 15 September 2022 contained the following sections:
“Renewing your registration
If you’re already registered with HMRC, we’ll contact you 30 days before your renewal date to remind you to sign in to your account to renew your registration.
HMRC sends messages to your anti-money laundering supervision account, not your business tax account. You will need to sign in to your account to read them.
If you do not renew within 30 days, your account will automatically expire and you will need to:
sign in to reapply
complete a new application
pay the fees due”
“After you’ve renewed online
You can sign in to the service to check the status of a renewal application.
You will not get a paper certificate, and you will need to renew your registration every 12 months…”
“Managing your account
After you’ve registered or renewed you can sign in to your account to:
check messages sent to you by HMRC
update your account
view your records and make changes if you need to”
“How to sign in
To sign in, you need a Government Gateway user ID and password. If you do not have a user ID, you can create one when you first register.
You must select an ‘Organisation’ Government Gateway account to register.”
The Penalties Framework
The version in force as at 7 March 2024, states that “Under this framework there are three steps necessary to calculate the amount of the penalty”.
The first step, entitled “Calculate the starting penalty”, is to calculate how long the business had been trading whilst unregistered where a trading period is defined as being three months or any part thereof. It states that:
“The starting penalty will be calculated as £5,000 for each trading period, with a maximum of 20 trading periods. Therefore, the maximum starting penalty is £100,000”.
The second step, entitled “Gross Profit Cap”, commences stating:
“The next step is to look at the business’s gross profit. The figure required is the most recent annual gross profit as penalties will be capped depending upon the amount of this figure. The purpose of this step is the meet the requirements within Regulation 83(1)(c) MLR 2017 to consider the financial strength of the business.”
The gross profit up to £1million is categorised into six bands with the penalties ranging between £1,500 and £100,000. Whatever band a taxpayer falls within, the penalty cap is 10% of the upper limit of the range.
For businesses with a gross profit of in excess of £1million the maximum penalty is £100,000.
If the penalty cap from the second step is lower than the starting penalty calculated from the first step, then the lower figure should be used.
The third step, entitled “Supplementary charge”, applies where the business has been trading whilst unregistered for more than 12 months and is £200 for each trading period.
The total penalty after the three steps have been completed can be reduced by 50% where an application to register is unprompted.
Once the three steps have been completed, the decision maker is directed to consider whether the penalty is appropriate and that is explained as follows:
“In determining whether the penalty amount is appropriate the decision maker (DM) needs to take into account the remaining factors within Regulation 83. If the DM considers the penalty amount is not appropriate, then they should adjust the amount of the penalty accordingly.”
It refers to other guidance, which has not been produced to us, but which apparently contains the details of what to consider when undertaking the appropriateness review.
If the penalty is paid within 30 days of the penalty notice then an early payment reduction of 25% is applied to the penalty (but not the “penalty administration charge”).