HMRC Updates on Money Laundering Regulation Breaches

HMRC has issued its latest update on businesses that failed to meet their obligations under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the “MLRs”), publishing the latest enforcement list on 9 February 2026. This annual disclosure continues HMRC’s practice of publicly identifying firms that have fallen short of mandatory Anti-Money Laundering (“AML”) standards, reinforcing the regulator’s message that compliance remains a core expectation across all supervised sectors.

Registration Failures Continue to Dominate the Enforcement Landscape

The updated list once again highlights a recurring theme: many of the penalties arise not from complex money‑laundering typologies, but from basic failures to register for AML supervision on time. 

HMRC’s report includes examples across several industries, emphasising that administrative compliance is still where many firms lapse.

Among the businesses cited:

• A mid‑sized property advisory firm received a £13,000 penalty for failing to register for AML supervision on time, illustrating that estate agency businesses remain under sustained regulatory scrutiny.
• A boutique art market enterprise was fined £2,900 for the same oversight, underscoring HMRC’s continued focus on AML controls within the art sector.
• A national accountancy and payroll services provider incurred a £52,000 penalty after failing to complete the required AML registration, marking one of the more significant fines issued in this enforcement cycle.

Alongside the individual listings, HMRC notes that the published information reflects its statutory responsibility to disclose enforcement outcomes. The regulator makes clear that while circumstances may have changed since the penalties were issued, the transparency requirement exists to support public confidence in the AML regime and to signal expectations to the wider market.

Implications for Firms Across the Regulated Sectors

This update serves as a timely reminder that HMRC views AML supervision failures, especially registration‑related breaches, as preventable and unnecessary. Firms supervised by HMRC, including estate agents, accountants, trust and company service providers, and art market participants, should ensure that their internal controls include:

• Monitoring of registration and renewal deadlines;
• Clear ownership of AML compliance responsibilities;
• Robust onboarding and due‑diligence processes; and
• Documented risk assessments aligned with the business model.

With HMRC demonstrating willingness to use its enforcement powers, even for administrative shortcomings, the message is straightforward: compliance fundamentals matter just as much as more sophisticated AML controls.

HMRC Penalty Trends 

The 2025–2026 supervisory data reveals several clear and instructive trends across HMRC‑supervised sectors:

1. Registration Failures Are Systemic Across Multiple Sectors

The HMRC report highlights a recurring pattern of businesses operating without first securing the required AML supervision. This issue spans multiple regulated sectors, including estate agency, the art market, accountancy service providers, and trust and company service providers. Across HMRC’s published penalties, “failure to apply for registration at the required time” remains the most common breach.

This type of breach is often referred to as low‑hanging fruit from an enforcement perspective: HMRC can readily identify breaches because the trigger occurs automatically when a business begins trading before obtaining AML supervision. Since registration failures are straightforward to detect and verify, they consistently feature among HMRC’s enforcement actions. Ensuring compliance from the outset is therefore essential. Seeking advice at the point of incorporation, or before commencing any regulated activity, helps businesses understand their obligations under the MLRs and avoid preventable penalties later. This confirms that administrative compliance, rather than complex due‑diligence failures, remains the primary driver of penalties.

2. Estate Agency Sector Continues to Carry the Highest Volume of Penalties

Although HMRC’s publication does not break down the penalties by sector, the number of estate agency firms appearing on the list makes it clear that the property sector remains one of the highest‑risk, and most heavily enforced, areas within HMRC’s AML supervisory remit. 

A key reason for this heightened risk is the unique regulatory burden placed on estate agency businesses. Unlike many other regulated sectors, estate agents must undertake Customer Due Diligence (“CDD”) not only on their own client, but also on the counterparty to a property transaction. This dual‑CDD requirement significantly expands their exposure to AML risk and increases the likelihood of non‑compliance if systems and controls are not sufficiently robust.

The sector also carries an added layer of inherent risk due to the nature of property transactions. Understanding and evidencing source of funds and source of wealth is fundamental to identifying potential money‑laundering activity, yet in practice, these checks can be complex, intrusive, and difficult to verify, especially where funds come from layered structures, crypto, offshore assets, gifts, or multiple pooled sources. Estate agencies operating without comprehensive procedures, documented risk assessments, or well‑trained staff are therefore far more likely to fall short.

Together, these factors explain why estate agents consistently feature in HMRC’s enforcement publications: the sector is high‑risk by design, heavily regulated, and inherently exposed to gaps in due diligence unless firms maintain strong, proactive AML frameworks. This mirrors the sector’s long‑standing vulnerability within the National Risk Assessment jointly published by the Home Office and HM Treasury in July 2025, and reinforces the need for agents to maintain robust compliance infrastructure.

3. Penalty Values Range Widely, but Higher Fines Are Becoming More Visible

Penalties in the latest enforcement round vary from a few thousand pounds to over £50,000, depending on the size of the business and the severity or persistence of the breach.

This reflects a broader trend; HMRC is increasingly willing to impose higher penalties on businesses whose failures represent wider systemic weaknesses or prolonged non‑compliance.

4. Transparency Remains a Core Enforcement Tool

HMRC emphasises in the publication that it has a legal obligation to disclose these enforcement actions publicly. This approach is intended to deter future non‑compliance and to ensure that supervised sectors are aware of the reputational risks associated with even “simple” administrative breaches.

5. The Profile of Non‑Compliant Businesses Is Diverse

Firms listed include:

• Small owner‑managed businesses
• Mid‑sized professional service providers
• Art market specialists
• Estate agency groups and regional property firms

This diversity indicates that AML oversight failures are not confined to one type of organisation or risk profile, any business subject to the MLRs can be penalised if it does not meet its obligations.

Practical Implications for Regulated Firms

Given the clear trends emerging from this year’s supervisory disclosures, firms should prioritise:

• Timely registration and renewal for AML supervision
• Regular reviews of AML policies, procedures and risk assessments
• Effective internal governance, ensuring accountability at senior levels
• Ongoing training, especially where staff turnover is high
• Document retention and record‑keeping aligned with regulatory expectations

HMRC’s latest publication sends a consistent message: basic compliance failures are avoidable and, increasingly, costly.