Thirty-five property sourcing firms have been fined over £150,000 in total between 1st April and 30th September 2023.
New research conducted by the National Association of Professional Sourcing Agents (NAPSA) has revealed that 35 UK-based property sourcing companies were fined £150,299 by HMRC for violations of anti-money laundering (AML) regulations between April and September of last year.
The fines, detailed in HMRC’s ‘fine list’ published in June this year, show that 251 property businesses in total – including estate agents and letting agents – were fined.
For sourcing agents, penalties ranged from £1,450 to £23,500, primarily due to a failure to register with HMRC for AML supervision at the required time. Some agents were also found to have violated other AML regulations.
“These statistics clearly show that HMRC’s focus is no longer limited to estate agents and letting agencies; it’s now extending to all property businesses that are breaching AML laws,” said Tina Walsh, CEO of NAPSA. “It’s time for property education firms to understand that their training around ‘property sourcing and deal packaging compliance’ is generally not up to the mark, and better training is necessary to prevent these fines.”
The sourcing businesses penalised were of various sizes and located across the UK, including 13 in London, three in Cornwall, two in Sunderland, and others in Harrogate, Kent, Luton, and Glasgow.
HMRC issued these fines for failing to register for AML supervision or for delays in registration after the businesses were set up at Companies House. The volume of transactions during this period, as well as the seriousness of the AML violations, were also considered when determining the fines.
NAPSA’s research also noted that some of the “methods used to avoid HMRC registration” are no longer effective, such as using an unclear Standard Industrial Classification (SIC) Code when registering at Companies House or assuming that operating as a sole trader would make the business invisible.
“Several sourcing agents that were fined had used vague SIC Codes or were operating as sole traders without an online presence, yet they were still found. How is that possible? Perhaps HMRC has discovered new ways to track businesses, and if that’s the case, there’s definitely no place to hide from HMRC, regardless of what some ‘experts’ claim.”
To learn more about the fines, visit www.napsa.org.uk/hmrc-aml-fines-sourcing.
