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which companies need to register with HMRC under new money laundering regulations?

The types of companies outlined below must register with HMRC and put anti money laundering systems in place so they can identify and prevent money laundering and report any suspicious transactions. Registration dates vary and they must all pay an annual fee (based on the number of premises through which they trade) and must report changes during the registration year. In addition, businesses which are Trust, Company Service Providers or Money Service Providers must also apply for a new fit and proper test for any person who owns or runs the business and their nominated officer or money laundering reporting officer.

trust or company service providers (TCSPs)

These include:

• Businesses, including recruitment agencies, involved in arranging for someone to act as either a permanent or interim director, shadow director or company secretary or partner of a partnership
• Personal service companies of interim managers acting as either a permanent or interim director, shadow director or company secretary or partner of a partnership
• Company formation agents
• Suppliers of accommodation or correspondence addresses for businesses other than sole proprietors and people acting as professional trustees
• Will writers and family offices (when not supervised by a professional body or the FSA), when they act or arrange for others to act as professional trustees.

The above businesses need to send MLR 100 registration form and MLR 101 fit and proper test application form(s) and fees for both. The deadline for receipt is 1st April 2008. Businesses set up on or after 15th December must register and apply for fit and proper test before carrying out business.

accountancy service providers (ASPs)

– includes book-keepers, payroll agents and tax consultants.

There will be a resister for ASPs opened on 1st April 2008 and a deadline for all applications of 1st July. Businesses will need to send MLR 100 registration form and registration fee.

money service businesses (MSBs)

- bureau de change, money transmitters and third party cheque cashers.

Existing MSBs need to send form MLR 100 registration form and MLR fit and proper test application forms and fees for both. Deadline for receipt is 1st February 2008. New businesses set up on or after 15th December 2007 must register and apply for the fit and proper test before carrying on business.

high value dealers (HVDs)

- businesses that deal in goods and accept (or are prepared to accept) a payment or payments in cash of at least 15,000 euros (approximately £10,000) in total, whether the transaction is executed in a single operation or in several operations that appear to be linked.

HMRC will, as part of its annual renewal process for HVDs, write inviting re-registration and registration fee. The deadline for receipt will be in the letter from HMRC. New HVD businesses set up on or after 15th December 2007 will need to register as soon as you make a decision that you are prepared to accept cash payments. You cannot accept cash payments if you are not registered.

You should check the full registration guidance to check if you need to register and apply anti-money laundering controls to your business so that you can identify and prevent money laundering and report any suspicious transactions.

how much does it cost to register?

The fee to register with HMRC for the period 1 June 2007 to 31 May 2008 is £95 per premises

which companies have to apply for a fit and proper test?

In addition to registration, businesses which are Trust or Company Service Providers or Money Service Providers must also apply for a new fit and proper test for any person who owns or runs the business and their nominated officer or money laundering reporting officer.

trust or company service providers (TCSPs)

These include:

• Businesses, including recruitment agencies, involved in arranging for someone to act as either a permanent or interim director, shadow director or company secretary or partner of a partnership
• Personal service companies of interim managers acting as either a permanent or interim director, shadow director or company secretary or partner of a partnership
• Company formation agents
• Suppliers of accommodation or correspondence addresses for businesses other than sole proprietors and people acting as professional trustees
• Will writers and family offices (when not supervised by a professional body or the FSA), when they act or arrange for others to act as professional trustees.

The above businesses need to send MLR 100 registration form and MLR 101 fit and proper test application form(s) and fees for both. The deadline for receipt is 1st April 2008. Businesses set up on or after 15th December must register and apply for fit and proper test before carrying out business.

money service businesses (MSBs)

- bureau de change, money transmitters and third party cheque cashers.

Existing MSBs need to send form MLR 100 registration form and MLR fit and proper test application forms and fees for both. Deadline for receipt is 1st February 2008. New businesses set up on or after 15th December 2007 must register and apply for the fit and proper test before carrying on business.

what is the fit and proper test?

A fit and proper test will be applied to those who effectively run, or are beneficial owner, of a money service business or a trust or company service provider. The test will check individuals against a number of objective criteria set out in the new Money Laundering Regulations. The intention is to deny the riskiest individuals access to the Money Service Businesses (MSBs) and Trust or Company Service Providers (TCSPs) sectors. HMRC will perform these checks at registration using an array of internal and external information sources. If any of these criteria are met, HMRC will have to refuse the application.

who is the fit and proper test applied to?

The fit and proper test will be applied to all money service businesses and trust or company service providers, at the time of registration, in respect of:

• The applicant
• A person who effectively directs or will direct the business
• A beneficial owner of the business

or

• Any nominated officer of the applicant.

In practice, this means all sole proprietors, partners; directors and nominated officers will need to be tested, as will certain shareholders and trustees.

how is the fit and proper test applied?

If your business is a MSB or TCSP the fit and proper test will be applied to those who effectively run, or are beneficial owner, of a money service business or a trust company service. Those applicants that need to apply for a fit and proper test will need to:

Ensure that each applicant completes form MLR 101

Each applicant will need to sign their form, and you will then need to return them with your registration application and the appropriate fee/s.

It is a criminal offence to make a false statement in order to register. Applicants will not be registered if the information provided is found to be false or misleading.

what type of questions is in the fit and proper test?

The information you must give is detailed and your identity will be verified and shared with organisations outside HMRC. For example there are questions on convicted offences (not ‘spent’ convictions), whether you are currently charged with offences, or if you have been adjudged bankrupt (or in Scotland if sequestration of your estate has been awarded). However if you have been discharged from bankruptcy you will not be affected. You have to state if you are currently disqualified from acting as a Company Director or have ever been the subject of a confiscation order under the Proceeds of Crime Act 2002. All the above questions will be cross checked and if certain of these criteria apply to a person who is in a position of ownership or control the business cannot be registered.

There are general personal details to answer including all names you may have been known under and nationality. You will also have to give passport details, National Insurance number, and ID number for countries that use it (e.g. Spain) and your driving licence number. Full details for all addresses in the last five years must be recorded and you must state your role in the business, eg company director or company secretary, and if you are appointed as Nominated officer. Money Laundering Regulations require all registered businesses to appoint a Nominated Officer to handle the anti-money laundering systems and controls of the business.

what are the deadlines for the fit and proper test?

MSBs must apply before 1st February 2008. TCSPs must apply by 1st April 2008.

how much is a fit and proper test?

There is a one off fee for each applicant, payable at the time of registration. The current fee is £50.

what do i need to do if information on my registration or fit and proper test application changes?

If you become aware of any changes to the information provided in your registration or fit and proper test application you must notify HMRC within 30 days of the change.

how do i get the forms i need?

You can follow the link here to the HMRC website, there are also guidance notes.

what do existing money service businesses (MSBs), money transmitters, bureau de change and cheque cashers need to do?

Send MLR 100 registration form and MLR 101 fit and proper test application form(s) and appropriate fee(s). The deadline for receipt is 1 February 2008.

what if I set up in business as a new MSBI on or after the 15 december?

You register and apply for the fit and proper test before you can carry on your business.

what do existing trust or company service providers do?

You will need to send the MLR 100 registration form and MLR 101 fit and proper test application form(s) and appropriate fee(s). The deadline for receipt is 1 April 2008.

what if I set up in business as a new TCSP on or after the 15 december?

You must apply to register and apply for the fit and proper test before you can carry on your business.

what should existing high value dealers (HVDs) do?

High Value Dealers will receive letters from HMRC as part on the annual renewal process and will be invited to re-registration and pay the fee. You will need to complete a short form and return it with the correct fee by the date contained in the HMRC letter.

what should new HVD businesses do?

If you are setting up in business as a new HVD on or after the 15 December you will need to apply to register as soon as you make a decision that you would be prepared to accept cash payments (around £9,000 but check with HMRC for specific details. You must not accept such a cash payment if you are not registered.

what should accountancy service providers (ASPs) do?

There will be a register for ASPs opening in April 2008 and the deadline for all applications is 1 July 2008. HMRC says this may change so check. ASP providers must send MLR 100 registration form and appropriate registration fee.

Heather Harrison is a highly regarded member of the Duport team. Her thorough knowledge of small businesses, combined with her talents developed during a career as a well respected journalist, make her articles very popular with our readers. Heather has worked on a variety of weekly and monthly magazines, both in the consumer and business press.