Reported by Riah Pryor

(Summarized version featured below)

Nearly 50 UK art businesses were named by HM Revenue & Customs (HMRC) for failing to comply with anti-money laundering (AML) regulations, with penalties issued between January and September 2024. Among those fined were prominent galleries like Opera and Carl Kostyál, as well as a White Cube fundraising campaign. The penalties, averaging over £3,000 and reaching as high as £13,000, were levied against businesses that failed to register by the June 2021 deadline. Some affected businesses voluntarily disclosed their late registration, with one gallerist noting that their hefty fine had deterred other dealers from coming forward. Many chose not to appeal due to difficulties in contacting HMRC and a desire to move past the issue.

Experts argue that HMRC’s approach may be disproportionately harsh, particularly for smaller businesses. Art compliance consultant Rakhi Talwar criticized the penalty calculation method, which is based on gross profits, even when transactions fall below the €10,000 threshold or do not involve qualifying art. Susan Mumford of ArtAML also highlighted the financial burden on micro-businesses and emphasized that working with HMRC officers to set up payment plans can ease the impact. She noted that voluntarily registering can reduce fines by 50%, with an additional 25% reduction for early payment. HMRC defended its actions, stating that enforcement is necessary to protect businesses from being exploited by criminals.

The inclusion of art advisors and interior design firms on the list highlights the broad scope of the regulations, which some argue were poorly communicated to intermediaries. Industry leaders are calling for a reassessment of AML requirements, with trade bodies like the British Art Market Federation and the Society of London Art Dealers advocating for a higher transaction threshold above €10,000. While Talwar acknowledges HMRC’s willingness to engage with the art sector, concerns remain about future penalties for additional breaches, which could result in significantly higher fines. Experts warn that continued scrutiny and evolving regulations will require businesses to stay vigilant to avoid severe financial consequences.

Read full report: https://www.theartnewspaper.com/2025/03/21/latest-round-of-money-laundering-penalties-hit-uk-trade