ECSH42576 - Operational Guidance: Establish when a business is trading 'by way of business’

Establish when a business is trading 'by way of business’

It is important to remember that it is only when a person carries out relevant activities ‘by way of business,’ that they fall within the scope of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) and must then register for anti-money laundering supervision.

There are some exclusions that should also be considered, these are detailed in Regulation 15.

High Value Dealers (HVDs)

A business that accepts or makes high value cash payments of 10,000 euros or more in exchange for goods that they sell commercially. A High Value Payment made or accepted for a private sale, is not by way of business and registration is not required.

Art Market Participants (AMPs)

A business who trades in or acts as an intermediary in the commercial sale or purchase of works of art and the value is 10,000 euros or more and/or operates a freeport storing works of art is carrying out the relevant activity by way of business.

AMPs were out of scope of the MLR 2017 until January 2020. AMPs were required to register with HMRC for anti-money laundering supervision by 10 June 2021.

Letting Agency Businesses (LABs)

A LAB is carrying out relevant activity by way of business if it does work after receiving instructions from a prospective landlord or tenant to let property or land where the individual rents are 10,000 euros per month or more and the rental length is 1 month or longer. This covers both residential and commercial property lettings.

LABs were out of scope of the MLR 2017 until January 2020. LABs were required to register with HMRC for anti-money laundering supervision by 10 June 2021.

Other supervised sectors

Estate Agency Businesses, Accountancy Service Providers, Bill Payment Service Providers, Telecoms Digital and IT Payment Service Providers, Trust or Company Service Providers and Money Service Businesses will know if they are carrying out a relevant activity by way of business, but there may be some circumstances where they may not be sure.

Full descriptions of what is considered as relevant activity is available on GOV.UK.

You should ask the business the following questions if you need to establish if they are trading by way of business if there is any doubt:

  • Is the business conducting relevant activity?
  • Does the business advertise or publicise the provision of relevant activity or receive referrals from other businesses?
  • Is the relevant activity carried out with a view to profit?

If the answer to all of these questions is ‘yes’, then they are carrying out the activity by way of business and you should advise them to register.

If the answer to all of these questions is no, then they are not carrying out the activity by way of business and they will therefore not need to register.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)