How to register with HMRC for anti-money laundering supervision

If you sell an individual work of art—or a series of linked pieces—for €10,000 (approximately £8,500) or more, you must register with HMRC for anti-money laundering (AML) supervision. This is a legal requirement designed to stop the art market from being used to launder illegal funds. Failing to register when you meet the criteria can lead to significant fines or even criminal prosecution.

Step 1: Check if you are an Art Market Participant (AMP)

In the eyes of the law, you become an "Art Market Participant" if you trade in, or act as an intermediary for, the sale of works of art where the value of a single transaction (or a series of linked transactions) is €10,000 or more. This includes:

• Artists selling their own work directly to collectors.
• Art galleries and traditional dealers.
• Auction houses and intermediaries.

A "linked transaction" occurs when you sell multiple pieces to the same person at the same time, or over a short period, where the total combined value hits that €10,000 mark.

Step 2: Register through the HMRC online service

Once you know you meet the threshold, you must register via the GOV.UK website. You will need to provide details about your business and pay a registration fee. As part of the application, HMRC will conduct a "Fit and Proper" test to ensure you are a suitable person to be trading in high-value goods.

Step 3: Implement Customer Due Diligence (CDD)

Registration is the first step, but you must also change how you handle sales. You are required to verify the identity of your customers before a high-value transaction is finalised. This usually involves:

• Identifying the buyer: Asking to see an original passport or photo driving licence.
• Verifying the "Beneficial Owner": If a company or trust is buying the art, you must identify who actually owns or controls that entity.
• Checking the source of funds: In some cases, you may need to understand where the money for the purchase originated.

Step 4: Keep detailed records

You are legally required to keep records of all your identity checks and transaction details for at least five years. HMRC can inspect these records at any time to ensure you are complying with the regulations.

Top Tip: Don’t be nervous about asking for ID. Most serious collectors are familiar with these rules. You can make it easier by adding a "Compliance" section to your website or terms of sale, explaining that you are an HMRC-supervised Art Market Participant.

Step 5: Appoint a Nominated Officer

Even if you are a sole trader, you effectively act as the "Nominated Officer." This means you are responsible for reporting any suspicious activity to the National Crime Agency (NCA). If you have a genuine concern that a buyer is trying to launder money, you must file a Suspicious Activity Report (SAR) before you complete the sale.