Estate agents are facing a sharp increase in their anti-money laundering costs after HMRC said it intends to raise its annual supervision fee by a third from £300 to £400 per branch.

It says it is proposing the 33% rise because the costs of providing supervision have increased considerably since the current £300 rate was first introduced in May 2019, and that it also needs to be able to continue ‘evolving its approach in the area’.

The increase will affect around 36,000 businesses registered with HMRC for AML supervision, including estate and letting agents.

Fees must increase to enable HMRC to maintain effective supervision.”

In its consultation document, the regulator states: “HMRC has looked carefully at supervisory income and costs in previous years. And projected income and costs for 2025 to 2026 and beyond. Fees must increase to enable HMRC to maintain effective supervision.”

Squeezed finances

The rise will heap yet more pressure on estate agencies’ already streteched finances. Industry estimates suggest the property sector is already spending over £125 million annually on anti-money laundering requirements, and individual branches are paying around £6,300 per year when staff time, training and registration fees are taken into consideration.

It is possible that some businesses may qualify for a small business fee reduction, although HMRC has not detailed eligibility criteria for the new rates.

The consultation will run until 29 August, with HMRC seeking feedback from all businesses that are currently registered for AML supervision. The regulator promises to publish the next steps after it has reviewed all the responses it receives.