ECSH47125 - False or Misleading Information
False or Misleading Information
Regulation 59(1)(b) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017)provides that HMRC may refuse to register an applicant when information provided under regulation 57 MLR 2017 appears to be false or misleading.
Regulation 60(3)(a) MLR 2017, with reference to regulation 59(1)(b) MLR 2017, provides that HMRC may suspend or cancel an existing registration if it appears that the business has provided false or misleading information under Regulation 57 MLR 2017.
Where a person
provides false or misleading information which the person knows to be false or
misleading or the person is reckless as to whether the information is false or
misleading is a criminal offence as specified within Regulation 88(1) MLR 2017.
The decision maker must consider making a criminal referral in these circumstances.
False information
HMRC considers information to be false when the information provided is deliberately inaccurate.
Example of false information
A business declares a single premises in its registration information. However, it was subsequently established that the business has always operated from 10 premises and should have declared 10 premises in its registration information.
In this case, the fees the business were required to pay (10 X £300=£3,000) were significantly lower than the amount it actually paid (1 X £300=£300). It appears that the business has deliberately underdeclared the number of premises to reduce their annual premises fees and has provided false information.
Misleading information
Information is misleading when information may be withheld or is only partially correct and it is presented in a way to deliberately deceive or mislead the party receiving the information.
Example of misleading information
An accountancy service provider (ASP), who had been supervised by a professional body (PB) was, following an investigation, expelled from the PB membership. The ASP then applied to register with HMRC and when asked if it had been expelled from a PB, declared it had left the PB. The ASP continued to state it had left the PB when it provided registration information at the annual refresh. During a later compliance intervention, it was established the ASP had provided misleading information and stated that the reason for not declaring its PB expulsion was to avoid a penalty and HMRC refusing to register it.
Sanctions
If any information appears to be false or misleading in a new registration application, then under regulation 59(1)(b) MLR 2017 the decision maker (DM) may refuse the application.
However, if material information provided by a business already on the register, appears to be false or misleading, the DM may consider suspending or cancelling the registration under regulation 60(3)(a) MLR 2017 as the conditions of regulation 59(1)(b) MLR 2017 apply.