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HMRC could increase AML supervision fee up to 100%

22nd Aug 2018
HMRC
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HMRC needs to increase its money laundering supervision fees by around 80% to 100% in order to recruit more staff to further strengthen its supervision.

Accountancy firms not supervised by a professional body could soon be paying more AML fees to HMRC, according to a new consultation that outlines three possible fee models that the tax department intends on rolling out from December 2018.

Although, the actual start date for the new AML fees could be phased in over more than one year.

HMRC said that it is taking a “more robust approach to tackling non-compliance” and needs to recruit a significant number of staff in order to meet the new requirements from the MLR 2017. HMRC currently supervises 27,000 businesses from accountancy firms to estate agents.

Revised fee structure options

After reviewing the costs for 2018/19 and 2019/20, HMRC has proposed three new structures which include an option where the current fee structure stays the same but with significant fee increases.

The second option would see HMRC charge a two-part fee, which covers a flat fee of £100 per business plus a turnover based fee; businesses with a turnover less than £20,000 would not pay this additional turnover fee.

This fee option would not take into account the number of premises.  

Option three, though, retains the current model of charging for each premise a business operates from but also introduces a scaling fee per premises tiered system. HMRC said that this approach could mean a business could pay a different rate for each charging tier or they’d have to move up to the next tier and pay the highest rate, which would be more straightforward for large businesses.  

Additional measures

In addition to the three new fees models, HMRC is also considering an introduction of an administration fee for late payment. This would be charged to recoup the extra administrative work required to collect the payment.

This late administration fee would either be charged as a flat fee of £100, a fee of 5% of the registration fee, or an escalating fee.

HMRC also intends to charge businesses an annual charge, which at the moment would be £20, for the retesting of work that it does on fit and proper persons.

Current model

At the moment, businesses supervised by HMRC pay £130 premises registration fee, a one-off £100 application fee, a £100 fit and proper persons test fee for any person exercising effective control of a money service business and a £40 approval test for each director.

In addition, there is a £1,500 penalty admission charge for businesses issued a compliance penalty and a £350 penalty administration charge for businesses that have a registration penalty.

In formulating these fees, HMRC recognised that it couldn’t charge different fees to different businesses for the same service and is favouring a simple fee structure for greater clarity.

The tax department said that it wants to keep the fees proportionate to work done as a supervisor and ensure that the fee structure is consistent.

The consultation is open until 28 September. You can respond to the consultation by emailing [email protected].

Replies (1)

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Bramble
By Chris.Mann
22nd Aug 2018 13:47

From my own experience, from just over 18 months ago, HMRC's practical supervision, relies on completely out of date review methods.
I had a visit, around November 2016, by two HMRC officers; one from the Birmingham hub, another from Leicester. The initial visit lasted around 2 hours and, handwritten notes were duplicated by both officers. The offer of hospitality (tea, coffee or water) were refused, presumably as it could be construed as an "incentive"? If that was the reason, I find that attitude completely perverse. However, given how HMRC generally perform, nothing surprises me.
Having "failed" a variety of "random tests" on the first visit, a further, return visit, was arranged for March 2017. In the interim, the main officer corrected his assertion, as regards some areas of my supposed failure and, on their return - again 2 officers from Birmingham and Leicester, completing hand written notes, I passed the tests with suitable and acceptable records.
There was some obvious "phishing" as regards my own personal details, which I found quite offensive but, when the UK's establishment sets it's stall out, it can make Russia and similar regimes look positively innocent!
Therefore, in summary, even with "consultation" HMRC will charge what they deem to be a realistic charge for MLR supervision and, presumably, will continue to employ; costly and outdated methods.
At the end of the day I, much like the rest of the supervised sector, is paying HMRC for the privilege of making reports, as unpaid Police officers.
Hey ho, did anyone expect anything else, in all reality!

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