It has been widely reported recently that from the 1st May 2019, HMRC increased their Anti-Money Laundering registrations fees by 250%, 150% and almost every figure in-between.  I calculate that the increase in their fees is actually around 59%. So, what does that mean for the overall initial sourcing business set up costs?

From 1st May 2019 the cost for each of the legally required registrations is as follows:

Property Ombudsman

The Property Ombudsman

a) Initial Registration Fee: £195.00 – per office

b) Annual Renewal Fee: £195.00 – per office

Property Redress Scheme

a) Entry Level Registration Fee: £110.00 – per person/branch

  • Charge of £100.00 – per Complaint investigated
  • Annual Renewal Fee: £110.00 – per person/branch

b)  Enhanced Level Registration Fee: £199.00 – per person/branch

  • Annual Renewal Fee: £199.00 – per person/branch

Information Commissioners Office (ICO) – Data Protection Supervision

Tier 1 – Business with up to £632,000 turnover per year

a) Initial Registration Fee: £40.00

  • Annual Renewal Fee: £35.00 – If paid via Direct Debit

HMRC – Anti-Money Laundering Supervision

a) Initial Application – 1 Person & 1 Premises

  • Application Fee: £100.00
  • Register Premises: £300.00
  • Fit & Proper Test: £150.00
  • Approval Fee: £40.00

TOTAL: £590.00

  • Annual Renewal Fee: 300.00

b) Initial Application – 2 Persons & 1 Premises

  • Application Fee: £100.00
  • Register Premises: £300.00
  • Fit & Proper Test: £300.00 (£150.00 per person)
  • Approval Fee: £80.00 (£40.00 per person)

TOTAL: £740.00

  • Annual Renewal Fee: 300.00

Cost of Registration

As a result of these changes it means that the total new cost of registration is as follows:

1 Person & 1 Premises (dependent on Ombudsman and level chosen)

  • TOTAL MINIMUM: £ 740.00 (excluding any VAT)
  • TOTAL MAXIMUM: £ 829.00 (excluding any VAT)

 2 Persons & 1 Premises (dependent on Ombudsman and level chosen)

  • TOTAL MINIMUM: £ 890.00 (excluding any VAT)
  • TOTAL MAXIMUM: £ 979.00 (excluding any VAT)   

 Of course, the cost of Professional Insurance also needs to be taken into account when calculating set up costs and if we work on a cost of £350.00 for a reasonable level of cover that pushes up the overall set up cost to:

1 Person & 1 Premises (dependent on Ombudsman and level chosen) 

  • TOTAL MINIMUM: £1,090.00 (excluding any VAT)
  • TOTAL MAXIMUM: £1,179.00 (excluding any VAT)  

2 Persons & 1 Premises (dependent on Ombudsman and level chosen)

  • TOTAL MINIMUM: £1,240.00 (excluding any VAT)
  • TOTAL MAXIMUM: £1,329.00 (excluding any VAT) 

One of the main reasons that many people enter the sourcing sector is because it is portrayed as being a ‘Zero’ cost business set up model.  As you can see from the above figures, nothing could be further from the truth and many sourcers will come out of some training courses motivated and ready to roll and then find out that actually, as they have little or no cash, cannot operate legally until they have saved up for the set up fees.

In the not too distant future, I can see costs rising again, especially as I have not known a rise in the cost of registering for Data Protection supervision in all of the years that I have been sourcing.

Tina Walsh

If you are unsure or have any questions please get in touch and why not join my Facebook group Property Sourcing Compliance Support I also have a book available to help guide you through all the regulations Property Sourcing Compliance.

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