On 31st July 2025, Art Market Participants (AMPs) received an email from HMRC announcing a proposed change to the fees charged for anti-money laundering supervision (AMLS). As a Key Stakeholder supporting AMP businesses of all sizes, we urge you to read the below and submit a response to HMRC’s consultation that is open to and including 29th August 2025. The points in this article provide ideas for consideration.
In responding, bear in mind that HMRC must somehow increase revenue being received from fees. Our approach is to make fees proportionate to the size of a business. The Policy paper published on gov.uk clearly outlines their need:
“Fees must increase to enable HMRC to maintain effective supervision.”
Send your reply to [email protected]
Proposed fee changes
In brief, HMRC’s fee changes that apply to AMPs are:
- An increase to the annual premises registration fee from £300 to £400;
- A reintroduction of the one-off £400 application fee; and
- An increase in the ‘penalty administration charge’ of £350 to a ‘sanctions charge’ of £2,000 (unless the penalty itself is less than that amount, in which case the sanctions charge will be the same as the penalty).
This consultation does not address compliance penalties that are ultimately directed to HM Treasury, but the various administrative fees collected by HMRC as AMLS regulator.
The proposed changes disproportionately affect small businesses
The Policy paper states:
“HMRC is looking to retain the current fee structure to keep things simple and provide greater certainty for supervised businesses. HMRC aims to keep the fees charged as low and reasonably possible.”
Acknowledging the intention to maintain simplicity, the Policy paper misses an opportunity to update the fee structure to be proportionate to the size of business being penalised. As an AML provider to the art market, our clients range from micro to large businesses and, accordingly, we are aware of how the current fee structure – including this proposed update, disproportionately impacts the smallest AMP businesses.
Recommendation #1: Improve support available to Art Market Participants
The Policy paper explains that ‘reasonably incurred’ expenses not only include costs of the registration system, approvals of responsible persons in a business, supervision and compliance interventions, costs of work to address compliance failures and work undertaken with other supervisors and law enforcement agencies, but notably, “help, guidance and advice to businesses.”
Our recommendation:
- As part of this change in fee structure, HMRC should reinstate the telephone support line for businesses they regulate for AML compliance.
Recommendation #2: Make the premises registration fee proportionate to business size
The annual flat fee for trading premises is set to change from £300 to £400. This 33% increase is slightly higher than 28% inflation since May 2019. If the fee had increased annually in line with the Consumer Price Index (CPI) since 2019, it would now be over £385.
The very name ‘premises registration fee’ brings to mind an opportunity to make this fee proportionate to business size, being fair to regulated businesses while raising additional revenue needed by HMRC.
Our recommendation in two parts:
- For premises that are a residential address (i.e., for working from home), keep it at the revised price of £400, in line with inflation.
- For premises that are not residential addresses, charge an additional fee on top of the £400 and look at basing this on the size of premises. For AMPs, it’s anticipated that these types of premises will largely fall into the following categories: gallery, office or storage (though the majority of storage facilities are likely to not be ‘relevant’ trading locations for the purposes of registration).
Recommendation #3: Re-introduce the application for first-time applicants only (with an option to eliminate altogether)
This is set to be £400.
Our recommendation:
- Based upon issues with the current renewal system, our view is that this should only be applicable to a legal entity that is applying for supervision for the first time.
The reasoning is two-fold:
- Some businesses who fail to renew annual AMP supervision have paid the fee, however didn’t complete the ‘Extend your supervision’ questionnaire in their AMP account as they thought that by paying the fee, they had renewed.
- In other instances, the person whose email address is associated with the AML Supervision account has either left the business or gone on extended leave. As only one email address may be associated with the AMLS account, no one working in the business at the time receives the communication and the registration lapses. This is an issue with how the registration system works and not with the registered business.
An alternative approach:
- Reduce this fee, base it upon business size or eliminate it altogether.
- With the premises registration fee having accounted for 90% of HMRC’s fee income in 2023 to 2024, and 94% of HMRC-supervised businesses operating from a single premises, taking the approach outlined in recommendation #2 above might largely if not entirely fund the shortfall being covered by the re-introduction of an application fee.
Recommendation #4: Only increase the ‘penalty administration charge’ for first-time applicants and make that charge proportionate to business size
This sees an increase in the admin fee for late registration penalties from £350 to £2,000, with a cap so that it does not exceed the value of financial penalty imposed.
Our recommendation in two parts:
- Any increase should only apply to legal entities that have not previously registered for supervision. This is for the same reasons outlined in recommendation #3 above.
- Instead of charging a flat fee, this penalty administration fee could instead be based upon the business’s gross profit in the most recent financial year. This is in line with how the gross profit based fee is calculated for late registration penalty and makes the admin charge proportionate to business size.
In Conclusion
We welcome HMRC’s aim to sustain effective AML supervision through appropriate funding, but urge a more nuanced, proportionate approach to fee structuring. As AML compliance specialists working directly with AMPs of all sizes, we have seen first-hand how the current and proposed flat-fee model disproportionately burdens small businesses, many of whom are striving to comply in good faith but operate on limited margins.
A fee structure that scales with business size and premises type would better reflect risk exposure and supervisory need, while still generating required revenue. Additionally, HMRC should pair fee increases with improved service – such as reinstating telephone support, to ensure businesses are not just paying more, but also receiving more meaningful assistance in return.
In summary, we support the principle of updating fees, but call on HMRC to refine their approach in a way that is fair, risk-informed, and reflective of the realities of AMP businesses. We encourage all AMPs to respond to the consultation and voice their perspectives by the 29th August 2025 deadline by emailing [email protected] .