26/02/24

Client thrilled as substantial HMRC Penalty Notice withdrawn

Client thrilled as substantial HMRC Penalty Notice withdrawn
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Our corporate client, involved in facilitating international money transfers, was subjected to a HMRC investigation and received an Intended Penalty Notice from HMRC seeking payment of £720,000 arising from alleged breaches of the Money Laundering (Information on the Payer) Regulations 2017 (‘the Regulations’).

The submission of Representations by the KANGS Solicitors team resulted in the withdrawal of the threat to issue a Financial Penalty Notice. Tim Thompson provides an account of this successful outcome.

The Circumstances

By virtue of the business conducted by our corporate client in facilitating international money transfers, they are required to comply with the Regulations to identify and assess the risks of money laundering and terrorist financing (MLTF).

Following the conclusion of an investigation commenced by HMRC in 2019, our client was advised that a penalty of £720,000 was to be levied on the basis that inadequate processes and policies were in place to identify and assess risk as required by the Regulations.

How We Assisted Our Client

To prepare for our clients' opposition to the proposed penalty, the KANGS team:

  • thoroughly examined and considered all documents provided by HMRC upon which it based the allegations.
  • attended upon our client taking detailed instructions, and considering the contentions and alleged failures raised by HMRC.
  • advised upon our client’s position, the processes, procedures, and internal documents which HMRC would expect to see operative to comply with the obligations imposed by the Regulations.
  • advised upon the appropriate course to adopt to challenge the Intended Penalty Notice.
  • prepared and submitted to HMRC, in February 2022, detailed Written Representations explaining our client’s position taking into account the penalty regime, framework guidance and relevant case law.

The Successful Outcome

Having considered the position at length, HMRC eventually confirmed, in February 2024 that a Penalty Notice would not be issued but that it would rely upon the issue of a Warning Notice, confirming the remedial steps which were to be observed.

The detailed Representations prepared and submitted by KANGS had enabled HMRC to retreat from the proposal to impose a significant financial penalty and, naturally, our client was extremely grateful for the detailed work which led to this successful outcome.

Who can I contact to help with Money Laundering and Tax Regulations?

The Team at KANGS provides enormous experience gained from advising companies, directors and individuals involved in Tax Disputes, Investigations and Prosecutions of every nature.

We welcome enquiries by:

Telephone: 0333 370 4333
Email: info@kangssolicitors.co.uk

We provide an initial no obligation consultation from our offices in London, Birmingham, and Manchester. Alternatively, we provide initial consultations by telephone or video conferencing.

Hamraj Kang

Hamraj Kang
Senior Partner

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Tim Thompson

Tim Thompson
Partner

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John Veale

John Veale
Partner

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