Anger as taxman hikes anti-money laundering fees by 250%

HMRC is hiking its anti-money laundering supervision fees charged to estate agents by 250% from next month.

The annual renewal fee will go up from £130 to £300 per office.

One furious agent, Gareth Styles, managing director of Grants in Woking, Surrey, said: “What a rip-off. Only HMRC could get away with it.”

Estate agents yesterday received emails saying:

“In continuing to strengthen its contribution to the UK’s fight against the threat of anti-money laundering and terrorist financing, HMRC is introducing significant changes to tackling non-compliance with the Money Laundering Regulations.

“Key improvements include:

  • increasing the number of staff available for compliance activity. That means carrying out more face-to-face and desk-based interventions with registered and unregistered businesses
  • providing more educational products and activity, including webinars and online learning. Helping registered businesses to get things right first time.

“These enhancements come at a cost. Our anti-money laundering supervision fees are changing from May 1, 2019:

  • the annual registration fee is increasing to £300 per premises for businesses with turnover of £5,000 or above
  • the annual registration fee is increasing to £180 for businesses with a turnover below £5,000.

“All customers will pay the £300 premises fee when they renew. However, if your turnover is less than £5,000 you can apply for a reduction.”

Mark Hayward, CEO of NAEA Propertymark, said: “While we welcome the increased resources from HM Revenue & Customs to tackle the issues around anti-money laundering, we are somewhat surprised at the significant uplift in fees in the region of 250%, particularly at a time when the industry is beleaguered by additional legislation.

“However, we look forward to seeing more enforcement activity as a result of the increase.”

He also wrote yesterday to members about the hike, adding: “The regulation team at Propertymark are currently working to check that companies that we believe should be registered are in fact registered with HMRC.

“It would be helpful to prepare staff in your office for any enquiry that your receive from us and respond promptly with information on registration numbers.”

HMRC declined to comment, but a spokesperson pointed us to a web page which was updated yesterday and includes information as to how for apply for a reduction if your business turnover is less than £5,000.

HMRC is increasing its AML fees for all the businesses it regulates, for example including accountants.

It is removing the £100 one-off charge levied when businesses first register for AML supervision, and will not proceed with plans to charge those who are late to renew for supervision.

HMRC will be using income from the increased fees to enlarge the number of staff working on compliance activity, and to carry out 80% more interventions.

In previous years – after responsibility for supervising the sector for AML was passed from the OFT to HMRC – a number of agents found it almost impossible to renew their registration online.

Last month, HMRC announced a major crackdown on agents, paying spot checks to a number of offices.

https://www.gov.uk/guidance/money-laundering-regulations-registration-fees

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36 Comments

  1. Property Poke In The Eye

    HMRC are just shafting agents and others under the guise of AML, where exactly does the money go?

    Times are hard for every industry the extra £100 here and there all adds up.

    Wait until the fee ban and its game over for a number of letting agents.

     

     

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  2. Typhoon

    Worse than Righmove for fleecing the industry. And when will Mark Hayward stand up for our industry. Weak response to the government industry bullies, so they will continue to pound us and rob our slim and getting slimmer profits.

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    1. Paul

      I’ve found the extra hike in fees so this will be cost neutral to me. My NAEA renewal is due at around £200. Considering how poor NAEA / Property Mark are at representing the industry I’ll give their renewal subscription to Hmrc it would seem.

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      1. Local Independent

        Property Mark have failed the industry, hence I have not joined or taken their training with a view to join.

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  3. ArthurHouse02

    Mark Hayward you wet weekend, time for stronger words or time to leave. Stand up for our industry rather than worried what Giv may think of you.

    As i have said before IMO money laundering in property is largely a myth. On PIE a while ago wasnt it revealed their had been something like 6 convictions in 9 years under AML. There is no interest in enforcement just rinsing agents for money.

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    1. Matthew Beaumont

      Isn’t the right way to look at it, a sector becoming regulated deters criminals from abusing the sector to launder money from risk of being caught.

      Take away all regulation and oversight and see how much money laundering goes on then.

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      1. ArthurHouse02

        Whilst i dont disagree with your comment, my own thoughts are the governments strategy is not about punishing those that use the proceeds of crime to purchase property, but to just increase the funds flowing into their own coffers.

        To clarify this additional cost has no impact on whether criminals are buying property or not. And is anyone suggesting that a criminal wont be able to provide proof of their identity, which as estate agents is our responsibility to check.

        If governments took their responsibilities seriously and watched what had been happening in London over the last 10-15 years we wouldnt be in this situation. But as they are now worried billions of pounds of property in the capital are owned by foreign criminals and large gangs they are panicking and pushing the burden away from themselves and the police onto estate agents who have little training in this area at all.

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    2. AGent

      New legislation = New courses to sell It’s in Propertymark’s interest that we’re flooded with new bureaucracy.  Why would they stand in the way.   Or am I getting cynical.

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  4. agent37

    Every LPE…

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    1. ArthurHouse02

      Dont they have some sort of group membership?

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      1. midsagent197772

        Nope, all individual businesses.

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        1. Mark Walker 2

          It’s okay, their individual turnovers will be less than £5,000.

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  5. Ric

    Joke obviously before anyone jumps in…

    Just allow a dodgy deal through… ignore the red flag and pay em via the fee on the sale you just know should have been sent to them.

    My defence your honour… “I needed a dodgy deal to pay for AML…but in theory I was simply diverting the dodgy money to HMRC in a slightly different way… win win for enveryone your honour”

    PS Just joking, come on… Money Laundering is a serious matter.

    They should clamp down on dodgy IPOs and share dealing, the most in your face robbery of money you have ever seen.

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  6. gardenflat

    The ironic point is that the government want to reduce fees to tenants but by putting everything up around agents we charge the landlord more who charge their tenants more and they end up paying for most of it in the long term.

     

    Great plan.

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    1. Local Independent

      Well said, what he giveth with one hand, he taketh away with the other. 

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  7. DASH94

    The cost is to provide for all the extra staff that are required etc.   Surely one of two things are happening then?

    a – They should be catching all sorts of ne’er do wells and general  money launderers and recovering the operating costs and then some

    or

    b – If that’s not happening (shocker), then the extra costs are being incurred because of the all the admin involved in making sure we’re all AML compliant.  Surely if no money is being saved/recovered then the solution is either to stop doing it or find a better way of doing it.

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  8. Andrew Weeks

    When will the administrative Civil Servants take a look at themselves as unsustainable. Ring fenced salaries and job’s for life (pensions for life) the solution isn’t fleecing the people that they serve. Paying for AML to do a job that arguable isn’t ours to do, what a hoot. Lets see if my clients will pay a fee to sell their property themselves…….

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  9. AGent

    ??? “the annual registration fee is increasing to £180 for businesses with a turnover below £5,000.”

     

    How many transactions?  One?  Three?

     

    If an agency’s declaring an annual t/o sub-£5k, I’d suggest HMRC go camp in their office!

     

    On a separate note, it took 20 months for the results of our last audit.  I was told I’d have the results within 3 weeks.

     

     

     

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    1. Property Poke In The Eye

      Is that an AML audit?

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      1. AGent

        Sure was.  The meeting started with them asking about our profits.  I could hear the cogs in their brains calculating how much they could fine us.  We were largely compliant – just needed to dot another i, cross another t.  A few questions came through 3+ months after the meeting.  I answered and it went quiet again.  I got the final letter with suggested improvements, all of which we had implemented soon after the first visit.  I could have been off for a year with stress and anxiety, worrying about a Countrywide/Tepilo sized fine.  Don’t expect the increase in subscriptions to improve the service they ‘offer’.

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  10. PossessionFriendUK39

    So, seems Govt doesn’t want Landlords, doesn’t want Agents and doesn’t want to provide homes in the PRS.

    Homelessness figures are rising, despite the Homelessness reduction (sic) Act 2017 – clearly everyone apart from Govt can see Housing policies aren’t working, in fact, having opposite effect !

    But as the Beautiful South sang,  ” Good as gold but stupid as mud, – they’ll carry on regardless. “

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  11. charlie.wright

    AML checks would be more effectively done by solicitors. AML is a matter of law-keeping which is what lawyers specialise in. Customer Compliance with the law should be ensured by lawyers, not by brokers of a deal whose fee is contingent on completion, and whose speciality is different. It’s ironic that conveyances get paid whether a deal completes or not, yet it is agents who are burdened with AML admin and costs, whether they get paid or not. Grossly unfair.

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    1. ArthurHouse02

      In fairness to solicitors/conveyancers they also have to do AML checks, but that is part of the joke i think. A buyer who is getting any sort of finance has to go through AML with the agent, solicitor and finance provider. Their passport will be photocopied so many times it will fade away.

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  12. Woodentop

    Disgraceful that honest law abiding agents are being made to pay overheads of HMRC to supervise non-law abiding. There used to be  a system where they would recover their costs from the penalties and the registration fee was, as it implies to cover the costs of running a register.
     
    Yet another overhead for an industry that is being told it can’t make money. I would love to see them try this on with another industry and its Unions … the country would come to a standstill. Where is our Union?

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  13. Mark Walker 2

    “However, if your turnover is less than £5,000 you can apply for a reduction.”

    It’s a shame this was not net profits instead of turnover then all the online agents could get the reduction and save their shareholders some much needed money.

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  14. Property Poke In The Eye

    Here’s a rough breakdown of running an office with skeleton staff.

    £300 AML

    £1000 PI and Office

    £480 CMP

    £234 TPO

    £15,000 Rent

    £25,000 Portals (RM and 1 other)

    £1500 Elecric and Water

    £3600 Business Rates

    £15,000  Car/Allowance 3 staff

    £3000  Fixed and Mobile Phones

    £3000 EA Software

    £24,000 Leaflets/General Marketing and training.

    £120,000 Salaries x 4 Staff

    £3600 Business Rates

     

    So before kick off each office needs about £220,000 to break even.  I know for a fact that offices around us are nowhere near this figure about 5 have closed in the last 12 months.  Any increases in cost will close businesses.

    Agents need to unite in order to survive.  There is no strong voice for our industry.

     

     

     

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    1. Woodentop

      Spot on. Is it now wonder that agents charge the fee’s they do … to cover their running costs, just like any other business and WHY ONLINE AGENTS who use commission fee’s in adverts is grossly misleading and not a fair representation to compare fees and service. Time the practice was stamped out by ASA and Government. A business should only be allowed to market based on its own abilities.

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    2. Estate Agent W1

      You counted business rates twice there and  if your rateable value is under £15,000 pa and you are a small business then your actual bill at the moment is £0 – this may help https://www.gov.uk/apply-for-business-rate-relief/small-business-rate-relief 

      I have saved you £7,200 already-that’s 6+ months rent free!!

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      1. Local Independent

        You beat me to it! 

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    3. agent37

      Equally this is why the agents without offices prove their point. The fleet, the utilities, the rent, none of these things help the vendors to sell. What percentage of clients walk in to an office to do a transaction?

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  15. HIT MAN

    Agents are always counting the pennies and in a cost cutting exercise I can see Rightmove taking a hit on this, I’ve already spoken with a few agents who are considering leaving RM when the fee ban comes in, I think this may well make there minds up!

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  16. Harry Albert Lettings Estates

    They say it like the fee increase benefits us… 

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  18. RadPropertyDude

    I’ve always thought, estate agents should be responsible for “fighting the war on terrorism”. haha!

    Grab your wash baskets, we shall launder them on the beaches…

     

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  19. jon@walterlloydjones.co.uk

    Am I being daft or is the £5000 turnover threshold ridiculously low? What agent can survive on £5000 turnover? Its galling that I will probably now have the same AML Supervision fee as Purple Bricks with a fraction of the turnover.

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