HMRC’s Latest Fine List: A Wake Up Call For Property Sourcing Businesses

Thirty Five (35) property sourcing businesses fined a total of more than £150k between 1st April and 30th September 2023.

CLITHEROE, UK. 10th September, 2024 - New analysis from The National Association of Professional Sourcing Agents (NAPSA) has found that 35 UK property sourcing businesses were fined £150,299 by HMRC for anti-money laundering (AML) breaches between April and September last year. 

The figures come from HMRC’s ‘fine list’ released in June this year, showing that 251 fines were issued total to property businesses - including lettings and sales agents. 

The fines for sourcing agents listed ranged from £1,450 to £23,500, all for failing to register with HMRC for Anti-Money Laundering supervision at the appropriate time, whilst others were also shown to have breached several other AML regulations with how they operate.  

“What these figures show is that HMRC are no longer focusing on just estate agency and lettings businesses, they are opening the net to catch all property businesses breaching AML regulations,” says Tina Walsh, CEO of NAPSA “It’s time for all property education companies to realise that their training around ‘property sourcing and deal packaging compliance’, in the main, falls far short of what it should be to prevent such fines from happening.” 

The sourcing businesses varied in size and locations across the country, including 13 businesses in London, three in Cornwall, two in Sunderland, as well as agents from Harrogate, Kent, Luton and Glasgow. 

HMRC issued the fines based on the absence of registration or the length of time taken to register for AML supervision, after setting up their sourcing business on Companies House, in addition to the amount traded during this period. Additional factors, such as seriousness of breaches have also been considered in these fines. 

From the in-depth research that NAPSA carried out, they have noted that some of the “tactics used to ‘avoid registering with HMRC’ will no longer work, such as using a ‘vague’ Standard Industrial Classification (SIC) Code for your business when registering on Companies House or thinking that acting as a Sole Trader makes you invisible.” 

“Several of those sourcing agents fined were registered under a ‘vague’ SIC Code or operated as Sole Traders; had no website presence, but were still found. How is that possible? Perhaps HMRC have found new methods of searching for businesses; if that is the case, then certainly now, despite what some ‘experts’ will tell you, there is no hiding place from HMRC.” 

To learn more about the fines visit www.napsa.org.uk/hmrc-aml-fines-sourcing