EXCLUSIVE: ‘Sourcing agents’ warned to be AML compliant or face ‘eye-watering’ fines

Property deal sourcing agents are being warned to ensure they are registered with HMRC for anti-money laundering compliance or face heavy fines.

Many ‘agents’ who arrange property investment deals are not currently registered with HMRC as they believe it is unnecessary.

But now one of these agents has been given a £1,700 fine by HMRC for trading without proving compliance with anti-money laundering, terrorist financing and funds transfer regulations.

Tina Walsh, CEO of the National Association of Professional Sourcing Agents (NAPSA), who highlighted the fine in a LinkedIn post told The Neg it is the first time she has seen a letter to a sourcing agent with a fine from HMRC.

“This letter is new. HMRC are now very interested in the sourcing sector. They were gobsmacked about the level of sourcing in the UK.”

In this case, the company was registered with Companies House, and HMRC assumed it was trading from that point.

She says sourcing agents sometimes believe they are covered by the compliance held by their clients, but that is not true. There are 10-15,000 sourcing agents active on LinkedIn, she says.

Eye-watering

If a sourcing agent merely introduces an investor to a company then it may be okay not to be registered, she says, but any action beyond that probably means registration is required.

Walsh says agents who have been active for several years without compliance could be facing “eye watering” fines. Many investors are also at risk of losing money as well, if agents get into financial trouble, Walsh explains.

Whether rent-to-rent agents need to register is a “grey area”, she says.

Mark Lloyd, co-founder of the Property Master Academy, told The Neg he has been warning sourcing agents for years that compliance was necessary and that they need to account for the cost in their budgets.