« Back to all posts

Identity of estate agents fined under anti-money laundering regulations could soon be revealed, HMRC warns


The identity of estate agents slapped with penalties for failing to adhere to anti-money laundering regulations — currently kept secret — could soon be revealed.

That was the warning from HMRC, which said it was reconsidering its policy on the issue.

At present, HMRC doesn’t reveal which estate agents have been fined, nor the size of the penalty they have been made to pay.

However, that could all change “shortly” as the taxman gears up to publicise details of certain offenders.

An HMRC spokesperson told EYE: “Under the new Money Laundering Regulations, HMRC is developing a policy to publish details of those not complying with the MLRs.

“On a case-by-case basis, HMRC will consider whether publishing would be disproportionate or if the penalty is of a minor nature and this will inform whether we publish penalty information with full identity details, anonymously or not at all. This policy is due to be implemented shortly.”

The revelation came to light following a report by Business Insider on Monday, which claimed that estate agents were being hit with secret six- or seven-figure penalties for failing to complete anti-money laundering checks properly.

Figures obtained by EYE from HMRC have cast doubt on whether the fines are actually anything like this big.

Quoting Mark Hayward, chief executive of NAEA Propertymark, Business Insider said there had been a “ramping up of compliance activity” but that the level of fines was not being publicly revealed.

It also quoted Hayward as saying that the “business busting” penalties ran into six or seven figures and that the “huge cost” of failing to comply with the new regulations and increase in enforcement action meant the “fear factor” was growing.

However, when EYE contacted HMRC to confirm the story, it revealed that the 886 penalties it issued to companies across all sectors of the economy last year together totalled just over £1.1m.

HMRC would not break down the penalties it issued further, nor say how many related to estate agency businesses, but it works out at an average of just over £1,290 per penalty.

The biggest fine an estate agency is known to have received for failing to comply with money-laundering legislation was the eye-watering £169,000 sanction issued by the now-defunct Office of Fair Trading to Jackson Grundy in 2014.

At the time, it was a fine 17 times larger than any previous penalty imposed on an estate agent but Jackson Grundy won its appeal against it in 2016 and had it reduced to just £5,000.

Mike Day, who runs Integra Property Services and is a regular EYE columnist, confirmed that HMRC is conducting regular visits and spot checks.

He said: “Mostly they are arranging to go and see an agent and then they are effectively conducting a bit of an audit. I have not heard of any huge fines.

“The biggest case I heard about was Jackson Grundy, which was £170,000, but that was reduced on appeal.

“There have been fines of £30,000-£50,000 which I know about.

“There was an interesting report recently from the National Crime Agency, which is who you should be making Suspicious Activity Report to if you suspect there is something dodgy happening.

“They produced a report that said that over the last 18 months only 0.2% of Suspicious Activity Reports had come from estate agents. The inference of that was quite clearly that estate agents aren’t treating this as robustly as they should do.

“I have had a number of clients contacted by HMRC. It is London-centric but it certainly isn’t exclusive to London. I have a client in Shrewsbury who had a visit from HMRC in Manchester.”

When contacted by EYE, Mark Hayward said: “All estate agents must be registered with HMRC for anti-money laundering purposes and are required to adhere to its systems and procedures.

“HMRC are making spot and random checks among agents, and failure to comply with anti-money laundering regulations will result in substantial fines. Due to the remit within which HMRC operates, it is currently unable to make public the names of those who have been fined, and the value of such fines.

“The case of £170,000 is historic and nearly four years old, before HMRC took control of the sector. As all other comments are anecdotal we cannot comment further, as they’re not in the public domain.”

HMRC did not provide a timescale to indicate when it may start naming and shaming firms that have been fined under anti-money laundering regulations.


Email the story to a friend

daily news
email from EYE

straight to your inbox

Join 20,000 industry colleagues
and subscribe to our free daily news email.

(You may unsubscribe at any time and we promise never to sell or pass on your email address)

Thank you! To complete the subscription, please click the link in the email we just sent you.

BELVOIRHamilton Fraser NSNES NSON THE MARKETViewber 1 NSMY DEPOSITSTPO CONF NSNFOPP SkyscraperTLI LL INS NSjobs board nsArena Push news story pages

[ comments ]

Source:: Identity of estate agents fined under anti-money laundering regulations could soon be revealed, HMRC warns