- Visits to your business under Money Laundering Regulations
- Appeals, penalties and Money Laundering Regulations
Visits to your business under Money Laundering Regulations
HM Revenue & Customs (HMRC) may visit your business if it's registered with them under the Money Laundering Regulations. The purpose of the visit is to check that you're complying with anti-money laundering legislation. HMRC will look at how you operate your anti-money laundering policies and procedures and help you make sure you've put the right systems in place.
This guide explains what to expect if HMRC contacts you to arrange a visit, so that you know who should be present, what HMRC will focus on, and the records they will want to see. It will help you to be prepared if HMRC decides to visit your business.
On this page:
- Why HMRC visits businesses registered with them under the Money Laundering Regulations
- How HMRC contacts a business to arrange a visit
- Who HMRC will want to talk to at the visit
- What HMRC does at the visit
- What records will HMRC want to see?
- At the end of the visit
Why HMRC visits businesses registered with them under the Money Laundering Regulations
HMRC makes sure that businesses registered with them are complying with the Money Laundering Regulations. They may visit your business if their information suggests there is a risk that money laundering could take place. If they do decide to visit your business this doesn't necessarily mean they think there's something wrong.
When HMRC visits your business they'll make sure you understand the anti-money laundering legislation. It's a good opportunity to ask them about anything you're unsure of. They'll look at your anti-money laundering policies and procedures to check that you're only doing what's really necessary. They'll check you know about any simplified procedures you could take advantage of.
How HMRC contacts a business to arrange a visit
If HMRC decides to visit your business they'll generally contact you by phone to arrange a convenient time.
They'll normally visit your main business premises so that they can:
- see how your anti-money laundering policies and procedures work
- have access to all the records and paperwork relating to your procedures
- speak to the right people
If you want HMRC to visit a different business premises you should let them know.
HMRC will write to you and confirm:
- the date and time of the visit
- who they'll want to speak to
- the information they'll want you to give them
- the records and documents they'll want to see
Usually they'll let you know in advance the names and contact numbers of the visiting officers.
Exceptionally, HMRC may visit a business without making an appointment. If they do, they will:
- identify themselves
- give a reason for the unannounced visit
Who HMRC will want to talk to at the visit
When HMRC arrives at your business premises they'll need to talk to the owner of the business.
After that, as the owner of the business you don't need to be there so long as a responsible person is present who can:
- answer the visiting officers' questions
- give the visiting officers any documents or information they need
Note that the nominated officer - and the person in the business who's responsible for complying with anti-money laundering legislation if that's someone else - should always be there during the visit.
Using a professional adviser
You can ask your professional adviser to be present during the visit. This may be especially helpful if they were involved with setting up your anti-money laundering policies and procedures, or with staff training. Bear in mind that they're likely to make a charge for their services.
What HMRC does at the visit
When HMRC officers arrive at your premises they'll identify themselves and show you their identity card.
They'll focus on your anti-money laundering policies and procedures to make sure these are working effectively to identify and reduce the money laundering risks your business might face.
What HMRC always does
During the visit the officers will always:
- check that the information on the HMRC register is correct
- check that the right people have taken the 'fit and proper' test if your business is a Money Service Business or a Trust or Company Service Provider
- look at the anti-money laundering policies, procedures and training you've put in place to manage and reduce the risks you've identified
- ask you to explain how your anti-money laundering policies and procedures work
- look at your risk assessment of your customers, products and services
They'll also answer any questions you might have about your legal responsibilities under anti-money laundering legislation.
Other checks HMRC might make
HMRC may also carry out some other checks. They may:
- examine your records of transactions
- check your customer due diligence procedures
- see how effective your systems are for identifying and reporting suspicious activity to the Serious Organised Crime Agency (SOCA)
- check that your staff know about anti-money laundering legislation and that they're trained to recognise and deal with suspicious activity
- make sure you've got the right systems in place
HMRC may inspect any cash they find on your premises if you're a High Value Dealer or a Money Service Business. They'll check that your anti-money laundering policies and procedures cover pawnbroking if you offer this as part of your Money Service Business.
What records will HMRC want to see?
As well as the checks listed above, HMRC might ask to see any of the following records:
- internal audits of how you've complied with internal anti-money laundering procedures and controls
- an external auditor's report if this covers your business's compliance with the Money Laundering Regulations
- relevant bank statements
- copies of and references to material proving a customer's identity
- a job description of the senior manager in your business who is responsible for complying with anti-money laundering legislation
- records of suspicious transactions and of the action you took
- copies of any Suspicious Activity Reports you submitted to SOCA, and any correspondence from SOCA concerning consent to proceed
HMRC will only look at Suspicious Activity Reports for anti-money laundering legislation purposes. They won't look at them for tax purposes.
At the end of the visit
HMRC aims to carry out their visit as quickly as possible. Unless you're a large or complex business they'll usually take less than a day.
At the end of the visit the HMRC officers will:
- review with you what they've done
- explain any areas of concern
- agree with you any action you need to take
- answer any questions you have
After the visit
After the visit, HMRC will write to you:
- setting out any action you need to take
- warning you if you may be liable to pay a penalty (although businesses that follow the HMRC guidance will not be liable to a penalty and will have protection from prosecution)
They'll give you a reasonable amount of time to let them have any information they need, and to put right any problems.
The interval between visits
The length of time before HMRC visits your business again varies. It depends on:
- the size of your business and how complex it is
- what type of customers you have
- your previous record of complying with the Money Laundering Regulations
For more information on HMRC visits you can download the HMRC Code of Practice COP28, 'Visits to businesses under Money Laundering Regulations' by following the link below.
Download COP28, 'Visits to businesses under Money Laundering Regulations' (PDF 77K)
