UK MSBs: HMRC registration, fees, risks and regulations

In September 2019 the sole director of a money service business applied to HM Revenue and Customs (HMRC) for registration. HMRC refused it in August 2020 because required information never arrived. The business kept trading until March 2022 and transmitted over £500,000 while unregistered. In December 2024 the director received 12 months' imprisonment, suspended for 18 months, 150 hours of unpaid work, £1,000 in costs and a five year disqualification (HM Treasury supervision report 2024 to 2025, Box 4.C). The National Risk Assessment 2025 describes a case with the same sentence and puts its sum at £543,680.

The US meaning is FinCEN's. In the UK most MSBs answer to HMRC. Regulation 28(11) adds ongoing transaction monitoring for customers in a business relationship, with scrutiny of their transactions throughout.

Which businesses count as an MSB in the UK, and how many are there?

Regulation 3 of the Money Laundering Regulations 2017 (MLRs) defines an MSB as an undertaking which "by way of business operates a currency exchange office, transmits money (or any representation of monetary value) by any means or cashes cheques which are made payable to customers" (regulation 3). They cover GB and Northern Ireland. HMRC's MSB registration page lists two neighbors on the same route: bill payment service providers and telecommunication, digital and IT payment service providers.

Their importance, in the NRA's account, lies in who uses them. MSBs "play an important role" for people who cannot or choose not to use mainstream banks: diaspora communities sending remittances, tourists changing money, people on low incomes cashing cheques (NRA 2025, para 5.109). Personal remittances paid from the UK reached $13.17 billion in 2025, against $11.57 billion in 2014 (World Bank, updated 8 October 2026).

Most MSBs work through agents. At the end of 2023 to 2024, 983 principals were registered with HMRC across 29,845 premises, and principals, agents and premises had fallen 51 percent between 2017 and December 2024 (para 5.110). HM Treasury counts 895 MSBs for 2024 to 2025 (Table 2.G).

complead, formerly Sanction Scanner, counted HMRC's public list, the Supervised Business Register, in its file dated 15 October 2026: 749 registration numbers carry the MSB flag and at least one approved row, each counted once (852 carry the flag in all). Dates and methods differ across the three figures.

Who does not need to register?

A business the FCA supervises does not also register with HMRC, and a cash courier that only collects and delivers money is not transmitting it. Occasional currency exchange or cheque cashing falls outside the MLRs only when every condition of regulation 15(3) holds. Among them: turnover from the activity of £100,000 or less and at most 5 percent of total turnover, no more than one transaction over £1,000 per customer, and a service for the main business's customers only. Picture a hotel that changes currency for its guests. Money transmission never qualifies. A cryptoasset exchange provider is a category of its own, supervised by the FCA (regulation 7).

How does an MSB register with HMRC, and does it also need the FCA?

The UK has no single MSB license. A currency exchange office or cheque casher takes the first step in Table 1. If you transmit money, you take all three.

Table 1: registration steps for a UK money transmitter, as the regulations read on 30 October 2026.

Before you apply, HMRC asks for a completed risk assessment, policies and procedures for the risks found, every BOOM on the application and every premises listed, and it may reject or refuse an application without them (register with HMRC).

Regulation 56(2) explains the opening case. An MSB that applied before 10 January 2020 could keep trading until HMRC decided, and that cover ended with the refusal in August 2020.

Agents sit on both registers. The FCA lists each agent of a payment institution, and the HMRC registration must list every agent's address, consistent with the FCA entry (who needs to register). The principal answers for the anti money laundering compliance of every premises and agent it lists, training included.

What is the fit and proper test for an MSB?

Regulation 58 makes HMRC refuse registration if the applicant, an officer, manager or beneficial owner, any agent, or an agent's own officers, managers or beneficial owners are not fit and proper. HMRC's fit and proper test guidance has three parts. An unspent conviction listed in Schedule 3 fails the test automatically. Part 2 weighs any consistent failure to comply with the regulations and whether the business could be used for money laundering or terrorist financing. Part 3 looks at honesty, skills and experience, and financial soundness, tax included.

HMRC's own example has an owner with a director, a recruitment manager and 10 agents. The owner and director take the test. The manager takes it only if the role touches the anti money laundering controls, as checking agents would, and the owner must be sure the agents and their BOOMs would pass.

A new BOOM applies within 30 days of joining, or within 14 days for the nominated officer and the director or senior manager responsible for MLR compliance. Leave an HMRC information request unanswered for 21 days and the application is refused. HMRC's MSB guidance adds that neither registration nor the test checks whether a business is professionally run: "Registration is a legal requirement to trade; it is not a recommendation or endorsement of the business."

What does HMRC registration cost from 1 December 2025?

Fees rose on 1 December 2025. HMRC also added an application fee (fees page, updated 22 December 2025). Older figures: the same page as archived on 25 November 2025.

Table 2: HMRC money laundering supervision fees for an MSB, before and after 1 December 2025.

Agent premises count when the principal sees all its agents' transactions, answers for how their business is run and sets the controls they use with customers. Picture a remitter with one office, 20 agent premises and three BOOMs. Year one costs £300 + 21 × £400 + 3 × £500 = £10,200, against £6,750 under the old fees (21 × £300 + 3 × £150). Each later year costs 21 × £400 = £8,400, against £6,300.

Once registered, what must a UK MSB do under the Money Laundering Regulations 2017?

Each duty below comes from the MLRs 2017 unless its line names HMRC's guidance or another text.

1. Risk assessment. Assess money laundering and terrorist financing risks by customer, country, product, transaction and channel (regulation 18), and finish it before you apply.
2. Policies and a nominated officer. Write controls for those risks and appoint a nominated officer to receive internal reports.
3. Due diligence at the sterling lines. Since 30 June 2026, customer due diligence (CDD) applies to an occasional transfer of funds over £800 and to other occasional transactions of £12,000 or more, single or linked (regulation 27). HMRC "expects that money transmission businesses should obtain and verify the identity of customers for all money transfers, regardless of value" (para 4.87).
4. Linked transactions. HMRC recommends checking for links over a rolling period of at least 90 days (para 4.92).
5. Payer and payee information. The retained UK copy of Regulation (EU) 2015/847 still sets EUR 1,000 as the line for the full payer and payee information on a transfer (Articles 5 and 6).
6. Agents. Train them and check that they and their BOOMs would pass the fit and proper test.
7. Reports. Staff report suspicions to the nominated officer, who decides whether to file suspicious activity reports (SARs) with the National Crime Agency.
8. Records. Keep due diligence and transaction records for five years after the transaction or the relationship ends (regulation 40).

HMRC already expects a transmitter to identify every customer on every transfer, so the £800 line of 30 June 2026 changes the written procedure more than the counter practice. The risk sits in manuals copied from HMRC pages that still print 15,000 and 1,000 euros, beside a transfer regulation that keeps EUR 1,000 in law.

The payer and payee details a transmitter collects are also what its sanctions and PEP screening runs on. complead's AML for payment providers software checks the payer and the payee of each transfer through the API while the transfer is processed. An analyst decides each possible match.

What money laundering and terrorist financing risks do UK MSBs face?

HMRC names four abuses (guidance, para 1.2). Transmitters take in criminal cash, often split into small sums, pay cash into somebody else's bank account, or move value between countries by netting off transactions without moving any money, the way hawala brokers settle. Third party cheque cashing lets people dodge the ban on paying cash for scrap metal, or avoid tax. People barred from working in the UK send the proceeds abroad. Currency exchange turns small notes into large notes of another currency, whose origin is then hard to trace.

According to the NRA, both risks remain high. For money laundering, criminals are drawn by cash, global reach, one off transactions and speed (paras 5.111 to 5.113). For terrorist financing it is the small amounts, which MSBs are unlikely to find suspicious (5.121, 5.122).

Firms with fewer than five premises, 15 percent of the sector, carry the highest risk of failing to comply and may lean on off the shelf compliance products (5.116). Large principals run fluid agent networks, and an agent one principal drops is free to join another (5.117). Banks show little appetite for MSB customers, and many MSBs now work through other MSBs and payment firms, a model the NRA says can disguise audit trails and makes investigations harder (5.119).

In July 2024 HMRC issued a £1 million penalty to a business remitting to a high terrorist financing risk jurisdiction (5.124).

Which legislation does a UK MSB answer to?

Most duties come from the MLRs. Six other texts set the payment rules, the offenses and the sanctions powers.

• The MLRs 2017: registration, the test, due diligence, records, penalties.
• The Payment Services Regulations 2017: FCA registration or authorization of transmitters and their agents.
• The retained Regulation (EU) 2015/847: payer and payee data.
• The Proceeds of Crime Act 2002, Part 7: money laundering offenses (sections 327 to 329) and failure to disclose (330 to 332).
• The Terrorism Act 2000, Part III: terrorist property offenses (15 to 18) and the regulated sector disclosure duty (21A).
• The Criminal Finances Act 2017: further information orders, longer moratorium periods after a report, and failure to prevent the facilitation of tax evasion.
• SAMLA 2018: the power to amend the MLRs (section 49) and make sanctions regulations. The terrorist asset freeze of the 2010 asset freezing act now sits in S.I. 2019/577.

What penalties can HMRC impose on an MSB?

Under regulation 76, HMRC can impose a penalty of the amount it considers appropriate, publish a statement censuring the business, or both. It can also suspend or cancel registration. A breach such as failing to register also costs a £2,000 sanction administration charge, capped at the penalty if that is smaller. Since 1 December 2025 HMRC also charges it on suspension, cancellation and censure, and up to £2,000 on other civil sanctions (sanctions and appeals, updated 28 January 2026).

Prosecution can bring up to two years' imprisonment, a fine or both on indictment (regulation 86). In 2024 to 2025 HMRC issued 739 fines worth over £5 million across all its sectors and canceled or suspended 59 registrations. Seven were MSBs. HMRC also secured six criminal convictions under the MLRs (HM Treasury report, Tables 4.H and 4.I, para 4.34). It made 45 intelligence led "days of action" visits to MSBs (para 3.43).

On 21 October 2025 HM Treasury decided that the FCA will supervise legal, accountancy and trust or company service providers once legislation allows (consultation outcome). MSBs are not on that list.

Which HMRC and Treasury steps reached MSBs in 2026?

• 12 February: HMRC clarified who must take the fit and proper test.
• 1 May: HMRC updated its MSB guidance; its due diligence paragraphs still print euro amounts.
• 30 June: S.I. 2026/621, made on 9 June, put the MLR lines in sterling: £800 for a transfer of funds, £12,000 for other occasional transactions and £1,000 in the occasional activity exemption.
• 15 October: HMRC's register file lists 749 approved MSB registration numbers (complead count).

The business in the opening could trade while HMRC decided because it applied in September 2019. An applicant today waits without trading. Picture one with one office and a sole director: it pays £1,200 to apply (£300 for the application, £400 for the premises and £500 for the director's test).