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HMRC doubles fines for money-laundering

Money laundering

HMRC doubles fines for money-laundering

Anti-corruption campaigners say drive to root out suspect cash does not go far enough

© PA

The UK tax authority almost doubled the fines it handed down for violations of money-laundering rules in the latest financial year, as the government steps up efforts to root out suspicious cash.

HM Revenue & Customs, which oversees compliance with anti money-laundering regulations by businesses including accounting firms, estate agents and dealers in luxury goods such as art and jewellery, fined companies £2.3m in 2017-18, up from £1.2m a year earlier.

However, anti-corruption campaigners said the sums were still far from sufficient to ensure companies did not facilitate money launderers — who shift an estimated £90bn in corrupt money through the UK each year.

Rachel Davies Teka, head of advocacy at Transparency International UK, said: “Whilst it is encouraging to note that in the past year fines dished out by HMRC for [money-laundering] offences have increased, this still only averages out at less than £3,500 per breach . . . it would seem that such fines offer little deterrent against money-laundering failings.”

But HMRC said the figures showed its work was “highly effective”. “Our financial penalties have doubled in value over the last three years as we have taken more robust action and tackled increasingly complex and high-risk cases,” said the department.

The property sector faces some of the highest money laundering risks. We have identified £4.4bn worth of property across the UK we consider to have been bought with suspicious wealth

Rachel Davies Teka, Transparency International UK

HMRC reduced the total number of penalties it handed down in 2017-18 to 655, from 901 a year earlier, resulting in the average fine more than doubling as it focused resources on fewer, more complex breaches of anti money-laundering regulations.

The department provided the figures in response to a freedom of information act request by the Financial Times, but declined to specify what types of businesses had been fined.

Transparency International said real estate businesses should be a focus for HMRC.

“The property sector faces some of the highest money-laundering risks,” said Ms Davies Teka. “We have identified £4.4bn worth of property across the UK we consider to have been bought with suspicious wealth.”

HMRC does not handle measures to combat money laundering through banks, which are regulated by the Financial Conduct Authority.

But HMRC does supervise money service businesses, such as bureaux de change.

It is one of 27 organisations with responsibility for overseeing compliance with anti money-laundering regulations, including a series of professional bodies plus the FCA and the government’s Insolvency Service.

HMRC chief executive Jon Thompson told the Commons Treasury select committee last month that it planned to look at whether other organisations might be better suited to take on its anti money-laundering responsibilities.

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