The average Anti-Money Laundering (AML) fine issued to the estate agents for non-compliance by HMRC has started to climb, reversing the previous downward trend seen throughout the pandemic.
The latest data for Q1 of the 2022-23 financial year from verification check provider Credas Technologies reveals that the average AML fine issued to estate agency businesses is sitting at an average of £3,815 – up 6% on the last financial year but still the second lowest average fine since 2018/19.
Total fines in the first quarter of the financial year hit £304,023, equating to 44% of total fines seen in the previous financial year in just a single quarter.
Worryingly, estate agents still account for the largest number of AML fines issued by HMRC since the introduction of AML supervision, accounting for nearly half (45.4%) of all fines issued. This is followed by accountancy service providers (41.1%) and money service businesses (4.6%).
Since 2017, estate agents have also paid the second largest overall penalty sum of £1.6m.
Only the money service businesses sector has been more heavily fined at a total of £4.7m, while accountancy service providers rank third with total fines valuing £510,000.
This is no doubt due to HMRC’s promise to crack down on illicit activity within the property market.”
Tim Barnett, Chief Executive of Credas Technologies, says: “At first glance, it might appear that estate agents are failing to get on top of their AML responsibilities.
“The sector ranks high both in terms of the total number of fines and their cumulative total, but the situation is more nuanced than the data might suggest.
“The majority of these fines are due to oversights rather than intended money laundering practices, with estate agents tackling a large number of transactions day in, day out, and this is evident given the fact that the average fine issued isn’t as severe as many other sectors.
“However, we have this average fine starting to creep up ever so slightly and this is no doubt due to HMRC’s promise to crack down on illicit activity within the property market.”