ECSH44395 | Operational guidance: trading whilst unregistered - when this applies

Approvals sectors

A business must apply for anti-money laundering supervision within 30 days of beginning relevant activity, otherwise a penalty may be imposed on the business for trading whilst unregistered as this is a breach of Regulation 56. Further guidance on type 2 penalties is available in ECSH82795.

Fit and proper sectors

As a business cannot act as a money service business (MSB) or a trust or company service provider (TCSP) until HMRC has approved its application to register for anti-money laundering supervision. When it is identified that an MSB or TCSP has been trading whilst unregistered, a type 2 penalty should be considered.

Identifying when a business may have been trading whilst unregistered

You should check the date a business began trading in the “business activities” section of its application form on enterprise tax management platform (ETMP) and compare this date to the business’ incorporation date on Companies House, and any self-assessment or corporation tax returns that the business has submitted to HMRC. Please note that the date of incorporation may not be the date on which the business started trading.

Policing the perimeter (PTP)

If HMRC establishes that a business is trading whilst unregistered but has not made any application to register, then the PTP team will issue an invitation to register letter and the PTP team may issue a penalty if no application is made.

If a business submits an application to register for anti-money laundering supervision after being contacted by the PTP team, a penalty for trading whilst unregistered may be imposed. It is the responsibility of the authorisations decision maker to issue the penalty and any penalty imposed would be considered a “prompted penalty” which would not be eligible for the 50% discount given to unprompted applications.