HMRC approval checks
Find out if you need to apply for an approval check, how to apply and how HMRC will carry out the checks as part of the business registration process.
Under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the regulations), accountancy service providers, art market participants, estate agency businesses, high value dealers and letting agency businesses are subject to approval checks.
Money Service Businesses and Trust or Company Service Providers must follow guidance on the fit and proper test.
The check is to make sure that the applicant, and its beneficial owners, officers and managers (BOOMs) are suitable people to carry out those roles. For a new application to register with HMRC, all BOOMs must be approved before we will register the business.
BOOMs can start in their role as soon as their approval application has been submitted, however, a BOOM must stop work in that role immediately if they fail the approval check.
The approval check does not check whether your business is professionally run or operated.
Approval check
HMRC must approve BOOMs before they can own or hold positions of authority within the following business sectors:
- art market participant
- accountancy service provider
- estate agency business
- high value dealer
- letting agency business
This is to prevent anyone with an unspent conviction for a relevant offence, whether committed in the UK or overseas, being involved in the running of the business or benefiting from it.
If a business also acts as a money service business or a trust or company service provider, the business and its BOOMs must be subject to the fit and proper test.
When a new BOOM joins your business after it has been registered, you should amend your registration through your Government Gateway account, apply and pay for the new BOOM to be approved. When a BOOM leaves your business, you should also amend your registration through your Government Gateway account.
HMRC will regularly review approval decisions, though you only pay for the check once per person.
Who needs to be approved
The approval process applies to:
- beneficial owners
- officers
- senior managers
- sole practitioners
Officers include:
- nominated officers and directors
- secretaries
- chief executives
- person controlling the company
- member of the management committee of a corporate body
- an officer or governing body member of an unincorporated association and any partner
- a manager, secretary or similar officer of a partnership
- any person acting or claiming to act in any of the above roles
Senior managers include those who:
- make decisions affecting compliance with the regulations
- are responsible for regulated activities
The check does not apply to managers who are not routinely involved in the anti-money laundering and counter terrorist policies and procedure of the business.
HMRC reserves the right to insist individuals undergo the approval check where it is necessary to safeguard a business from money laundering or terrorist finance risks.
How to apply
Apply online when you register for anti-money laundering supervision.
There is a fee for approval.
The approval check is part of the registration process. If you have a new BOOM join your business after it’s registered, you must apply and pay for an approval check before they start their role through your online Government Gateway account.
HMRC will check your information against its own records and against police records.
We may check BOOMs and sole practitioners at any time after registration to make sure they should continue to be approved.
The business must take care to make sure no one acts as a BOOM that has not applied to be approved by HMRC.
If a BOOM moves to a new business, they may need to undergo the approval check again.
Unspent relevant convictions
You must tell HMRC about any unspent relevant convictions that a BOOM in your business, or you as a sole trader, have.
An approval is invalid if it’s obtained by error or dishonesty, for example if an unspent relevant conviction is not disclosed.
If a BOOM in your business, or you as a sole trader, are later convicted of a relevant offence:
- you must tell us within 30 days of the date the business became aware of the conviction
- the BOOM must tell us within 30 days of the date of conviction
The approval becomes invalid from the date of conviction.
You can check if you need to tell someone about your criminal record.
After you apply
We will notify you of the outcome of your application within 45 days of receipt.
We may also ask for additional information. If we have questions about your application, we will write to you via secure communications on your Government Gateway account to agree a date and time for a telephone call or visit to one of our offices. We will use the email address provided on your application to notify you of this.
If you fail the approval check
If you’re not approved, you must not act as a BOOM or sole practitioner.
If you’re applying to register and a BOOM fails the check, we will not register your business.
It’s a criminal offence to act in a role knowing you have not been approved by HMRC or your approval is no longer valid.
You may be liable to imprisonment for a term not exceeding 2 years, a fine or both.
If you are adding a new BOOM, that person must not take up that role until you’ve applied for them to be approved. If they do, HMRC may take civil or criminal action against your business.
If we find that a BOOM in your business has been convicted of a relevant offence after they have been approved, we may cancel or suspend your registration, or ask you to remove the BOOM.
Whether you’ve got a relevant unspent conviction is a matter of fact. This means there is no right of appeal as HMRC have not made a decision.
Disclosing information
BOOMs subject to the approval check are expected to be fully transparent in their dealings with HMRC.
They must make full and frank disclosures of any material that may be relevant and declare any unspent relevant convictions. If they’re in any doubt about whether something is relevant or needs to be declared they should contact HMRC. They could be liable to prosecution if they provide false or misleading information.
BOOMs should continue to be transparent after they have been approved. They must disclose any change or development that affects their approval.