ECSH63320 - Regulation 9 - Carrying on business in the UK

Category Heading	Description
The Law	https://www.legislation.gov.uk/uksi/2017/692/regulation/9
What it means	A person undertaking relevant activity in the course of business in the UK must be registered for AML supervision by one of the UK AML supervisors (per regulation 8, subject to regulation 15 exclusions). In circumstances where it is clear that a business is in the UK, Regulation 9 does not need to be considered. However, if this is unclear, this regulation helps understand the certain circumstances which would require a business to be on the UK register.
Purpose	To ensure business'/persons considered to be carrying out relevant activity in the UK are supervised in the UK even if not based here.
Time Line	There was no specific regulation defining ‘carrying on business in the UK’ under previous Regulations
What to establish	Confirm that:    the person’s registered office is in the UK. If the person does not have a registered office, their head office is in the UK - 9(3)(a) and;  the day-to-day management of the person’s business is the responsibility of that office, or of another UK office maintained by the person in the UK. -9(3)(b)  Note: 9(4) only applies to the Gambling Commission.
How to test compliance & Evidence to obtain	“Day-to-day management” - This means the management or oversight of the business activity. It does not mean the relevant activity itself (“carrying out” of the business’s main work).  “Responsibility for”- The UK office merely needs to be responsible for the day-to-day management. It can be differentiated from “liability for” day-to-day management. It does not necessarily mean that the day-to-day management activity is being carried out by the UK office – the UK office only needs to be responsible for it.   The business’s officers, managers and beneficial owners do not need to be based in the UK in order for the business to be treated as being in the UK for AML purposes.   The location of the business’s customers is irrelevant for the purposes of this regulation, they do not need to be UK customers.  For a business to be considered UK based under Regulation 9(1) and 9(3) it is necessary to understand where the responsibility for day-to-day management of the relevant activity is located. This is determined on a case-by-case basis.
Best Practice	It is not relevant where the actual work of the business is being carried out, or where the owners are living, or where the customers are based. It is only necessary to understand where the responsibility for day-to-day management of the relevant activity is located, in order to understand whether a business must be considered UK-based for the purposes of Regulations 9(1) & (3).     At its simplest, the application of Reg 9 (alongside other regulations) provides three broad rules-of-thumb:    Where all activity is UK-based, registration is required.  Where all activity is outside of the UK, and there is no UK footprint at all, ECS should not register.  Where the business has both a UK and overseas footprint, there is nothing in the MLRs that covers what to do when registration in both the UK and another country seems probable. A relevant person should comply with the requirements of all countries in which it is active but be mindful that businesses with branches and subsidiaries located outside of the UK must have equivalent procedures (see Reg 20).
AMP	No additional Best Practice.
ASP	No additional Best Practice.
EAB	No additional Best Practice.
HVD	No additional Best Practice.
MSB	No additional Best Practice.
TCSP	No additional Best Practice.
Further Reading
FAQs	If an accountant with UK customers, where the accountant submits tax returns or tax refund claims via HMRC’s online agent services but has no UK presence, do they need to be registered with HMRC?     In these circumstances, the UK has no AML jurisdiction over the business. This is a matter into which ECS can be drawn by other HMRC business areas, and while we have no supervisory remit over such businesses it is reasonable to expect ECS to have the working knowledge of AML requirements in other countries that would assist other HMRC teams.