Tax agency stopped from operating following serious AML breaches

23 February 2023

A company which charged taxpayers significant sums to make claims for tax refunds has been stopped from operating, according to a release from HMRC.

Tax Credits Ltd (TCL) can no longer trade as a repayment agent after HM Revenue and Customs (HMRC) found they had committed serious anti-money laundering breaches.

As a result of breaching the regulations, which are predominately designed to prevent businesses being exploited by criminals to launder money, it is now a criminal offence for TCL to trade as a tax repayment agent.

The move comes weeks after HMRC outlined greater protections for customers using repayment agents.

Commenting on the news, Martin Cheek, managing director of leading anti-money laundering software platform SmartSearch, said:

“This action from HMRC should act as a stark wake-up call to all regulated businesses about their responsibilities to prevent money laundering and carry out due diligence as required by law.

“All regulated businesses have to establish who they are dealing with, and Tax Credits Ltd have learnt this lesson the hard way. Now, more than ever, regulated firms should be adopting electronic verification (EV) to secure against money laundering and fraud – as recommended by the Government in the 2020 Money Laundering and Terrorist Finance Act.

“To truly know your client, electronic verification simply requires their name and address, a date of birth is optional. In just two seconds you will have results from independent and robust sources as well as protection from the risk of breaching money-laundering or sanctions rules – breaches that come with eye-watering fines and significant reputational damage.

“Businesses can be up and running with a full one-stop-shop electronic anti money laundering (AML) platform that partners with the world’s best data suppliers in 24 hours. This will deliver completely reliable ID verification with automatic global sanctions and PEP screening with ongoing monitoring in a matter of seconds, ensuring your firm remains AML compliant at all times”.