Before we do anything more, let’s remind ourselves what AML is and why it matters (While most people will already be familiar with the concept, it’s something we don’t always think about day to day, so here’s a brief refresher!)
Anti-Money Laundering (AML) refers to the rules and processes businesses must follow to prevent criminals from using their services to hide or move illegal money.
If your business operates in certain sectors, UK law requires you to:
- Identify your customers (KYC)
- Monitor transactions for suspicious activity
- Report concerns to authorities
- Have internal policies and controls in place
Which businesses are caught by AML rules?
Many businesses don’t realise they fall within scope of AML regulations until quite late in the process.
In general, you are likely to have AML obligations if your business:
- Handles money or payments on behalf of customers
- Helps set up or manage companies or trusts
- Provides financial or investment-related services
- Deals in high-value goods where large cash payments are accepted
- Facilitates property transactions
- Offers accountancy, tax, or legal services
Some common examples include:
- Fintech and payment businesses
- Crypto-related businesses (in certain cases)
- Company formation agents
- Accountants and tax advisers
- Estate agents and letting agents
- High-value dealers (e.g. luxury goods, vehicles, art)
- Money service businesses (e.g. remittance providers)
If your business touches customer money, financial transactions, or company structures, there’s a strong chance AML rules apply.
Because the rules are broad, the key question is not your job title or industry label. It’s what activities your business actually carries out.
Dealing with the issue of registration. FCA versus HMRC registration. Which one should I choose?
One question we are hearing more frequently from clients is this: “Do we need to register with the FCA, or with HMRC for AML supervision?”
The answer to this depends entirely on what your business actually does (see above notes).
Understanding which supervisor applies to you is essential andgetting it wrong can lead to delays, rejected applications, and unnecessary regulatory friction.
So, when is FCA registration required? (as opposed to HMRC registration)
In some cases, a business may fall within the Annex I list of financial activities.
These activities include areas such as:
- Lending
- Dealing in financial instruments
- Participating in securities issues
- Providing investment services
Even if a business relies on an exemption or exclusion from FCA authorisation, it may still be treated as an Annex I Financial Institution for AML purposes.
Where this applies, the Financial Conduct Authority (FCA) will usually be your AML supervisor, and you will need to apply for FCA supervision as an Annex I Financial Institution.
So that leavesHMRC supervision. When does this apply?
If your business is not already supervised by the FCA or a professional body (such as ACCA or the Law Society), and it operates within certain sectors covered by the Money Laundering Regulations, you will normally need to register with HMRC for Anti-Money Laundering Supervision (AMLS).
HMRC supervises several sectors, including:
- Money service businesses (not supervised by the FCA)
- Company service providers
- Accountancy service providers
- Estate agency businesses
- High-value dealers
- Art market participants
- Bill payment service providers (not supervised by the FCA)
- Telecommunications, digital and IT payment service providers (not supervised by the FCA)
Businesses operating in these sectors must register with HMRC’s AMLS regime to comply with the UK’s anti-money laundering framework.
Why getting this right early matters
Choosing the correct supervisory authority early in the process can save time and avoid complications.
It helps businesses:
- Avoid delays or rejected applications
- Reduce regulatory friction
- Ensure their AML framework meets the expectations of the correct regulator
- Start operating with the right compliance structure from day one
Quick Checklist: Do You Need FCA or HMRC AML Supervision?
Use this simple decision guide to get an initial view:
Step 1: Are you already FCA authorised?
- Yes → You will usually be supervised by the FCA for AML
- No → Go to Step 2
Step 2: Do you carry out financial services activities (e.g. lending, investments, securities)?
- Yes → You may fall under FCA Annex I → Consider FCA supervision
- No → Go to Step 3
Step 3: Do you handle or move money for customers (e.g. payments, remittance, bill payment)?
- Yes →
- FCA authorised/payment institution? → FCA
- Not FCA authorised? → Likely HMRC AMLS
- No → Go to Step 4
Step 4: Do you provide any of the following services?
- Company formation or company secretarial services
- Accountancy or tax services
- Estate agency or lettings
- High-value goods (cash transactions €10,000+)
- Art market services
- Yes → Likely HMRC AMLS
- No → Go to Step 5
Step 5: Are you supervised by a professional body (e.g. ACCA, ICAEW, Law Society)?
- Yes → Your professional body may be your AML supervisor
- No → Go to Step 6
Step 6: Still unsure?
If your business:
- Touches customer funds
- Supports financial transactions
- Involves company structures or assets
You likely need AML supervision, but determining which regulator can be nuanced.
How Lawbox Can Help
If you think your business may need to register for AML supervision, or you’re unsure whether FCA Annex I or HMRC AMLS applies, getting the right advice early can make all the difference.
At Lawbox, we work with businesses to determine the correct regulatory framework and guide them through the registration process.
If you’d like to discuss your situation, feel free to get in touch. We’re here to help.