What happens if you’re not registered for AML?

If your business falls within scope of the UK Money Laundering Regulations 2017 (as amended) (MLRs), AML registration is not optional. Operating without it is a criminal offence, and the consequences range from financial penalties to prosecution of individuals within the business.

The rules apply across a broad range of sectors, including accountancy and tax advisory, legal services, trust and company service providers (TCSPs), estate agents, letting agents (above the monthly rent threshold) and high-value dealers (HVDs). 

If your firm falls into one of these categories and carries out regulated activity, registration and compliance obligations apply from day one.

Who needs to register and with whom

Regulated firms must register with the appropriate AML supervisor. Which supervisor that is depends on the sector.

For accountants and legal professionals, the supervisor is typically a sector-specific professional body or another of the sector’s recognised supervisory authorities such as HMRC. 

For estate agents, HVDs and letting agents above the threshold, the supervisor is HMRC. TCSPs that are not supervised by an accountancy or legal professional body should also register directly with HMRC.

HMRC maintains a public register of supervised businesses. Firms that are in scope and unregistered are, in effect, operating illegally.

If you’re not sure whether you need to register

The starting point is understanding whether your firm falls into the definition of a “relevant person” under the MLRs. How that’s determined varies by sector.

Under Regulation 11, an external accountant is a firm or sole practitioner who by way of business provides accountancy services to other persons. This includes accountants, auditors, bookkeepers and tax advisers. In all cases, scope covers the firm as a whole.

Under Regulation 12(1), an independent legal professional is in scope only when participating in:

• financial or real property transactions concerning the buying and selling of real property or business entities; 
• the managing of client money, securities or other assets; 
• the opening or management of bank, savings or securities accounts; 
• the creation, operation or management of trusts, companies or similar structures. 

A litigation-only firm may fall outside scope entirely, though individual matters can draw it in.

Under Regulation 12(2), a TCSP is in scope when providing services such as:

• a registered office or business address; 
• the opening or management of bank or savings accounts; 
• the creation, operation or management of trusts, companies or similar structures.

Under Regulation 13, estate agents are in scope when acting in relation to a sale of land or other relevant activities, with no minimum transaction threshold. Letting agents are in scope only where the monthly rent is €10,000 or more.

Under Regulation 14, a HVD is in scope when making or receiving cash payments of at least €10,000 per transaction, whether in a single operation or in several operations which appear to be linked. 

The MLRs themselves and your sector supervisor’s published guidance are the primary references for that assessment.

If there is any doubt, seeking advice from HMRC is the more defensible position. Operating in a grey area without registration is not a defence if enforcement action follows.

What if you don’t register?

Regulation 56 of the MLRs makes it a criminal offence to act as a “relevant person” in a regulated sector without being registered or supervised. The offence can be committed by the firm itself and by individuals in it, including partners, directors and senior managers.

In serious cases, individuals responsible can face up to two years in prison. Financial penalties can also be imposed. In 2024/25 alone, HMRC has issued over 500 fines specifically for failure to register, with total penalties across all AML breaches exceeding £3 million for the year. 

Beyond fines, HMRC has the power to refuse or cancel a firm’s registration, making it unlawful to carry on the regulated activity. For firms supervised by a professional body, serious AML failures can also lead to disciplinary action. This could include removal of membership and the right to practise and fines.

Getting compliant

Registration is the first step. The AML compliance framework that supports it needs to be built at the same time. The MLRs set out what that framework must include. Supervisors expect it to be in place from the point the firm begins regulated activity.

The core requirements are:

• a nominated officer (MLRO) responsible for receiving internal suspicious activity reports and deciding whether to submit them to the NCA;
• a senior manager appointed as Money Laundering Compliance Officer (MLCO) with overall responsibility for AML compliance (if you’re a sole practitioner, you’ll be both the MLRO and MLCO);
• a documented business-wide risk assessment that genuinely reflects risks, including those presented by the firm’s client base, services, geographies and delivery channels;
• AML policies, controls and procedures (PCPs) that are tailored to the risks identified in the business-wide risk assessment and are accessible to all staff;
• customer due diligence processes covering identification, verification, beneficial ownership, client risk assessments, ongoing monitoring and an escalation process to enhanced due diligence;
• a documented internal escalation route for suspicious activity;
• regular, role-appropriate AML training for all relevant staff, with records kept to evidence completion.

These are legal requirements, not best practice. Supervisors assess whether they are in place and working, not just whether they exist on paper.

Final thoughts

Operating without AML registration carries genuine legal risk for a firm and for the individuals responsible for running it. The MLRs are clear on this and supervisors actively monitor the supervised population to identify non-compliant or unregistered businesses.

If your firm is in scope and not yet registered, the right step is to engage your supervisor and begin building the compliance framework the MLRs require. Getting registered and building a compliant AML framework from the outset means you can demonstrate to clients, counterparties and supervisors that your business takes its obligations seriously.

AMLCC is designed to support exactly that. From your business risk assessments and AML policy through to client due diligence, sanctions and PEP checks, staff training and internal reporting, everything is centralised, documented and ready for supervisory review.