HMRC hits agents with larger non-compliance fines

Fines issued to agents for anti-money laundering non-compliance are getting bigger, reversing a downward trend seen throughout the pandemic, according to new research. 

Data for Q1 of the 2022-23 financial year shows that the average AML fine issued to agencies is £3,815.  This is six per cent higher than during the 2021/22 financial year. 

Total fines in the first quarter of the current financial year hit £304,023, equating to 44 per cent of total fines seen in the previous financial year in just a single quarter. 

Agents continue to account for the largest number of AML fines issued by HMRC since the introduction of AML supervision. The sector accounts for 45.4 per cent of all fines issued, followed by accountancy service providers (41.1 per cent) and money service businesses (4.6 per cent).

Since 2017 agents have paid the second largest overall penalty sum of £1.6m. Only the money service businesses sector has been more heavily fined at a total of £4.7m. 

A spokesperson for Credas Technologies, which undertook the research, says: “At first glance, it might appear that agents are failing to get on top of their AML responsibilities. The sector ranks high both in terms of the total number of fines and their cumulative total, but the situation is more nuanced than the data might suggest.

“The majority of these fines are due to oversights rather than intended money laundering practices, with agents tackling a large number of transactions day in, day out, and this is evident given the fact that the average fine issued isn’t as severe as many other sectors. 

“However, we have this average fine starting to creep up ever so slightly and this is no doubt due to HMRC’s promise to crack down on illicit activity within the property market.”