Hidden tax on landlords or agent attempt to pass on costs?

Hidden tax on landlords or agent attempt to pass on costs?

10:39 AM, 1st March 2018, About 6 years ago 8

Text Size

Due to the Anti Money Laundering regulations of 2017 changes, when the regulator changed from OFT to HMRC, we are legally obliged to carry out an AML check on all our landlords to ensure everyone is compliant with the law.

During the next few weeks we are going having to undertake the checks on all our landlords, we need to know from you within the next seven days the full name of all landlords connected with the property we have let for you, all landlords full addresses and all landlords dates of birth, can you please ensure this is emailed to our admin department.

There is a charge for this service as we have to use an independent company to carry out these checks for us, and have to have an electronic storage for a period of time, the checks include your ID, you being found at the address you have given to us, and certain other legalities, if you would like further information on this please visit – https://www.gov.uk/guidance/money-laundering-regulations-introduction

The fee is £12.00 including VAT per person, if we manage your property we can certainly take this from the rental we collect for you. If not please call the office with your payment details.

My question why is the cost of any change or changes always down to the landlord to foot the bill all the time, any advice would be grateful. Yes it isn’t a large amount of money… It’s just yet another thing a landlord has to bend over and take … Or is the agent trying it on….?


Share This Article


Neil Patterson

10:41 AM, 1st March 2018, About 6 years ago

Hi Mark,

Property118 is not an agents but we are registered with HMRC for Money Laundering Regulations under Tax Consultancy.

We use Jordans for AML checks and each one costs £3.60, but there is obviously a time cost as well to add to that.

jay shah

17:20 PM, 1st March 2018, About 6 years ago

I granted AST tenancy to a couple , June 2017. They arrived in UK from. Romania about. Three years ago. In December husband paid the last rent and moved out , leaving the partner and baby . Partner wants a new tenancy in her single name so she can claim Houseing benefits . She is working two days a week, earning about £150 per week and getting child benefit about £130 per week . She is behind in rent by two months . Jan and Feb 2017. If I granted new tenancy then I cannot give section 21 for another four months. Original tenancy is in joint name. Will housing benefit pay if I leave it in the joint name. He is moved abroad. I would like to keep her as a tenant if housing benefit is paid . Pl advice.

Luke P

19:11 PM, 1st March 2018, About 6 years ago

Reply to the comment left by jay shah at 01/03/2018 - 17:20
What has this got to with AML?


14:47 PM, 2nd March 2018, About 6 years ago

Nothing but my 2 cents worth. WTF ? Zero contribution to the exchequer and straight to HB and CB ? I suppose it is to do with AML. Acquisition of public funds through immoral means. Hope she stiffs you big time. I have been busting my backside in employment and a bit of renting for the past 30 years, never tapped public funds and you hear this . I took a wrong turning in life, took the wrong slip road, the one that directed me to Personal Responsibility Crescent.

Dominic Ferard

11:12 AM, 3rd March 2018, About 6 years ago

The oversight by HMRC only applies to estate agents not to businesses that are pure letting agents. I don't think pure letting agents are obliged to conduct these checks (nor of course to charge owners for them).

11:17 AM, 4th March 2018, About 6 years ago

The agent only needs to take a copy of your ID and keep it in a safe place.

There is NO legal requirement for third party services which are just a money making racket and identity theft risk.

If your agent charges you for this, get rid of them.

Graham Bowcock

13:06 PM, 4th March 2018, About 6 years ago

Dear Mark

Money laundering strictly speaking only applies to estate agents, not letting agents; my firm has spent many hours looking into this so as to be sure. However, we do money launder all clients whichever side of the business they are on as we regard it as good practice. It is fairly cheap and clients are used to such things these days.

You wouldn't get a solicitor to draft a lease until they had done money laundering and proved ownership, so we take the same view. A Land Registry search costs just £3. Better safe than sorry. It also means that we can tie the tenancy into the correct property owner (rather than their son, wife, cousin or anyone else of convenience); this means that the tenancy is enforceable because it is correct.

Whether or not an agent has a legal duty to do money laundering checks, there can be issues under Proceeds of Crime, so any steps taken to properly identify clients has to help.

For most professionals, AML has become a part of life and isn't going to go away any time soon.


0:09 AM, 5th March 2018, About 6 years ago

It is important to check who your clients are and ask them to provide documents to prove it. If an agent sees the ID and takes a copy to keep on record, they have covered themselves for compliance and reduced risk to their business.

Third party checking websites will try to persuade you that you will be 'even more covered' if you share your clients ID with them online. This is just marketing for a service that there is usually no practical need to purchase. Not only that, but by using the service you create more risk and compliance issues for your business.

For example, what are your procedures for complying with data protection law if you are disclosing your clients ID to other businesses? What will you do if there is a data breach at the other business for which you may be liable to your clients?

As with many things, the simpler you make it the simpler it will be.

I think these companies are taking advantage of agents who are anxious to do a good job and comply with the law but are often too busy to find out exactly what they need to do to cover themselves. Then a website promises 'just click here, pay £3.99 and you have met your legal obligations'.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now