There are just two weeks left for letting agents to register with HM Revenue & Customs if they want to be fully compliant with anti-money laundering regulations.
The reminder comes from CDDCheck, an online platform that says enables businesses to ‘electronically screen against individual stakeholders and businesses at a vastly reduced cost’.
The firm says that the terms of the EU’s Fifth Money Laundering Directive - implemented in January 2020 and still applicable in the UK despite Brexit - makes it a legal obligation for every letting agency business that lets property valued at 10,000 euros per month or its equivalent currency (£8,600 a month in the UK) to register with HMRC.
The pandemic saw the deadline for registration extended to June 10 2021, but after that date anyone who should be registered but isn’t will be committing a criminal act.
While agents have been legally obliged to comply with the legislation for the last 18 months, Covid and Brexit meant the legal deadline was pushed back until next month.
Agents can continue with their day-to-day business assuming they have started the AML registration process, with CDDCheck suggesting that HMRC typically confirm registration 45 days after a company has made contact.
“To be compliant, there are a number of things that agents must adhere to” says CDDCheck managing partner Andrew Harris.
“This includes undertaking an AML risk assessment, providing thorough training for all staff working on the frontline, and having a detailed AML policy and procedure document in place.”
Harris says fines, repetitional damage and ultimately even imprisonment are the penalties to be faced by non-compliant agencies.
A report by the UK Treasury and Home Office in December claimed luxury London homes were being used to launder illicit funds with the risk level for the sector upgraded, accompanied by the claim that ‘corrupt foreign elites continue to be attracted to the UK property market, especially in London, to disguise their corruption proceeds.’
The report found that half of the estate agents advertising properties for sale at £5m-plus had failed to register with HMRC for AML supervision in 2019 or had failed to pay their annual fees for this.
HMRC found that, even among companies that had registered, not all had implemented sufficient training for staff.