For many regulated businesses, anti-money laundering (AML) compliance often sits quietly in the background, important, but seen as a tick-box exercise. Recent enforcement activity by HM Revenue & Customs (HMRC) shows why that approach carries real risk.

In recent months, HMRC has continued to update its corporate report, which details financial penalties against regulated businesses that have not complied with the money laundering regulations (2024 to 2025), particularly where registration for AML supervision was missed, delayed, or allowed to lapse. These outcomes serve as a clear reminder that registration is not a formality. It is the starting point for lawful operation under the UK’s AML framework.

Registration: A Small Step with Serious Consequences if Missed

Under the Money Laundering Regulations, certain businesses, including estate and letting agents, accountancy service providers, trust or company service providers and others, must register with HMRC for AML supervision before carrying out regulated activity.

Despite this, failure to register on time remains one of the most common compliance breaches identified by HMRC. In practical terms, this means businesses have traded while unregistered, often without realising that missed registration deadlines expose them to enforcement action.

HMRC’s published penalty lists make clear that even where there is no evidence of money laundering, the absence of registration alone can be enough to trigger a financial sanction. In many cases, penalties are issued alongside an administration charge, increasing the overall cost of non-compliance.

Recent HMRC Penalties Send a Clear Message

HMRC’s most recent published enforcement data includes a number of penalties imposed on regulated businesses for failing to apply for AML registration on time.

Among the published outcomes are fines issued to:

• An estate agency business that was penalised several thousand pounds for operating without registration.
• A lettings firm was fined following a delayed application for AML supervision.
• An accountancy service provider was sanctioned after failing to meet registration requirements.
• A fine art company was fined several thousand pounds for failure to meet registration requirements in time.

These cases are not isolated. Over time, estate and letting agents in particular have featured heavily in HMRC’s enforcement publications, with cumulative fines between 2024 and 2025 running into the millions. The pattern is consistent: when registration is missing or late, HMRC will act, and publish the outcome.

Latest published report: Gov.UK – Businesses that have not complied with the money laundering regulations (2024 to 2025).

Why Registration Is Only the Beginning

Registration is often treated as an administrative hurdle, but in reality, it is the gateway to wider AML responsibilities. Once registered, a business must be able to demonstrate that it has taken its obligations seriously and put appropriate systems in place.

This includes:

• Carrying out and documenting a business-wide AML risk assessment.
• Maintaining policies and procedures that reflect how the business actually operates.
• Appointing a nominated officer and ensuring responsibilities are clearly understood.
• Training staff and keeping proper records.

Where registration is missing, HMRC scrutiny often goes further, examining whether other core compliance measures were ever in place at all.

A Wider Warning for All Regulated Sectors

While estate agents currently dominate HMRC’s published penalty lists, the underlying message applies across all regulated sectors. Registration failures are easy for regulators to identify and difficult for businesses to defend.

HMRC’s approach to publishing penalties is deliberate. Public outcomes are intended to deter non-compliance and encourage businesses to treat AML obligations as an integral part of operating in a regulated environment, not an afterthought.

Furthermore, with supervision under the UK’s anti-money laundering (AML) regime undergoing a landmark transformation – read our article here, ‘What The AML Supervision Reforms Mean For Regulated Businesses’ – regulated businesses are set to face unprecedented scrutiny.

What Regulated Businesses Should Be Doing Now

For businesses operating in regulated sectors, early action can significantly reduce regulatory risk. Practical steps include:

• Confirming registration status: Check that your business is registered with HMRC if required, and that your registration is current. If you have missed the renewal, register now. Late registration attracts a penalty, but it’s far less than the fine for continuing to trade unregistered.
• Reviewing AML risk assessments and conducting an independent audit: It is a regulatory requirement for most businesses operating in the regulated sector to carry out an ‘Independent Audit of AML Policies, Controls and Procedures’ and is essential to comply with Regulation 21 of the Anti-Money Laundering Regulations. Failure to undertake this audit results in failure to comply with the Regulations, and it remains your responsibility to your regulator to ensure this is done effectively. The problem for many businesses is how to satisfy the ‘independence’ requirement of Regulation 21 (1) (c) of the MLR 2017. Our Full Regulation 21 Audit Service provides businesses and their owners with a truly independent audit and report which meets regulatory requirements and is specifically designed to comply with the requirements of the MLR 2017.
• Updating policies, controls, and procedures so they reflect current business activity: Our team of business experts will assist you and your staff in navigating the complexities involved with policies, controls, and procedures (PCPs) to ensure they remain compliant with the requirements of the regulations.
• Undertaking customer due diligence (CDD) as part of your compliance obligations: Regulated businesses that fall under the scope of the Money Laundering Regulations (MLRs) must undertake customer due diligence (CDD) as part of their compliance obligations. CDD involves putting in place various processes and undertaking necessary checks to ensure your customers are who they say they are. CDD can be onerous, particularly for small businesses or those considered as a high risk of being used as vehicles for financial crime. However, regulated businesses can outsource their responsibility for due diligence to specialist external CDD providers. At the Regulation and Compliance Office (RACO), our experienced compliance experts provide a comprehensive Outsourced Due Diligence & Risk Assessment service tailored to your needs. We carry out the due diligence work and prepare risk assessments, so your internal team can focus on review and oversight.
• Ensuring staff understand their obligations, supported by appropriate training: Providing training is a legal requirement for all regulated businesses. All staff are required to understand the actions that need to be taken and how they comply with the legislation, both personally and on behalf of the firm. RACO provides a range of training courses designed to equip compliance officers with the necessary skills and understanding – AML Training for Regulated Businesses.

About RACO and Our Services

At the Regulation and Compliance Office (RACO), we support regulated businesses across multiple sectors with the practical management of AML, risk, compliance, and regulatory obligations.

We work closely with:

• MLROs and Nominated Officers
• Compliance and Risk Leaders
• Senior Management Teams

Our services include tailored guidance, training, documentation, and ongoing compliance support—always designed around your business model, sector, and regulatory exposure.

We do not offer templated solutions. Instead, we deliver bespoke, best-practice compliance frameworks that meet regulatory expectations and stand up to scrutiny.

Our Compliance Solutions Support Businesses With:

• UK Money Laundering Regulations 2017
• FCA and other supervisory authority expectations
• Financial crime risk management
• Governance, oversight, and audit readiness

Our comprehensive compliance packages are designed to be cost-effective and scalable, supporting regulated businesses of all sizes.

Key Services Include:

• Outsourced Due Diligence & Risk Assessment: We carry out the due diligence work and prepare risk assessments, so your internal team can focus on review and oversight.
• Anti Money Laundering (AML) Compliance Service: This support service has been designed to provide AML regulated businesses with an effective solution for the management and control of compliance with the Anti Money Laundering Regulations. Our service is an annual subscription that provides Businesses with ongoing support from our compliance team and ensures your Business has in place appropriate and compliant Policies, Controls, and Procedures (PCP’s) that are maintained by us.
• Risk, Anti Money Laundering Guidance and Register Administration Service has been designed to provide Businesses and their Money Laundering Reporting Officer (MLRO) with a support function that ensures their regulatory and compliance obligations are fulfilled on an ongoing basis, and staff are provided access to ongoing advice as needed.

Talk to our Compliance Experts 

We work with businesses to create the necessary documentation and have the processes in place to ensure the business and its staff are thoroughly protected.

To enquire about our services and how we can service your business, call us on 0203 985 8550 or email us at info@regulationandcomplianceoffice.co.uk