Money Service Businesses and Money Laundering Regulations

Businesses that exchange currency, transmit money or cash cheques for their customers are known as 'Money Service Businesses'. Money Laundering Regulations require most Money Service Businesses to register with HM Revenue & Customs (HMRC).

This guide will help you decide if you need to register as a Money Service Business with HMRC and includes links to more information about how to register.

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What is a Money Service Business?

The term Money Service Business has a special meaning under the Money Laundering Regulations 2007, which came into force on 15 December 2007. Under the regulations, your business is a Money Service Business if it does one or more of the following:

  • acts as a bureau de change - even if this is on a ship that isn't always in UK territorial waters
  • transmits money, or any representation of money, in any way (just collecting and delivering money as a 'cash courier' isn't transmitting money)
  • cashes cheques that are payable to your customers

HMRC is the supervisory body for most Money Service Businesses under the Money Laundering Regulations. If you run a Money Service Business it's your responsibility to register with HMRC unless you're already supervised by the Financial Conduct Authority (FCA) for the purposes of the Money Laundering Regulations. You mustn't act as a Money Service Business until you're either registered with HMRC or supervised by the FCA.

*Pawnbrokers who act as Money Service Businesses must register with HMRC, who will supervise both the pawnbroking and the money service aspects of their business.

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When you don't need to register as a Money Service Business

Occasional money service activities

If you exchange currency or cash cheques only occasionally, or only on a limited basis, then you don't have to register as a Money Service Business if you meet all of the following conditions:

  • your total turnover from these money service activities mustn't be more than £64,000 a year
  • turnover from money service activities mustn't make up more than 5 per cent of your total annual turnover
  • currency exchange or cheque cashing transactions worth more than 1,000 euros must be limited to one per customer - this could be one single transaction or a series of smaller transactions that seem to be linked
  • the money service activities must be secondary to your main business activity and directly related to it
  • the currency exchange or cheque cashing service must only be available to customers of the main business - it mustn't be available to the public
  • your business mustn't already be operating as a Trust or Company Service Provider or an Accountancy Service Provider

More about Accountancy Service Providers and Money Laundering Regulations

More about Trust or Company Service Providers and Money Laundering Regulations

Transmitting money not by way of business

If you transmit money from time to time but not by way of business you may not have to register. If you think you fall into this category then you should contact HMRC to check.

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Acting as a cash courier

Cash couriers collect money from their customers and deliver it to someone else. They do jobs like re-stocking cash dispensers and delivering cash for shops. This is not transmitting money, so it's not a Money Service Business activity. If you just operate as a cash courier you don't need to register as a Money Service Business with HMRC.

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Consumer credit licenses and Money Laundering Regulations

If you have a consumer credit license and also operate as an MSB, HMRC will supervise both your consumer credit activity and your Money Service Business activities. When you put in place anti-money laundering policies and procedures you'll need to make sure these cover all your activities undertaken under the money laundering regulations. Find out more about putting in place anti-money laundering systems by following the link below.

Read about setting up anti-money laundering policies and procedures

If you have a consumer credit license for your business, but you don't offer Money Service Business activities, the Office of Fair Trading (OFT) will supervise your business as a Consumer Credit Financial Institution under Money Laundering Regulations. You can find out more on the OFT website.

Read about pawnbrokers and Money Laundering Regulations on the OFT website (opens new window)

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Registering with HMRC as a Money Services Business

If you're not already supervised by the Financial Conduct Authority for the purposes of the Money Laundering Regulations you mustn't operate as a Money Service Business until you've registered with HMRC.

To register with HMRC as a Money Service Business you'll need to fill in a registration form and provide all the information requested. You'll also need to apply for a fit and proper test. You can find out more about how to register and what the fit and proper test involves by following the links below.

How to register under Money Laundering Regulations

Applying for the fit and proper test

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