For most estate agents, the reality of an HMRC Anti-Money Laundering inspection only becomes clear when the letter lands.
There is no warning and no pause on trading. From that point, the business is under scrutiny and must demonstrate in detail how it manages compliance risk.
Agents are expected to respond quickly while continuing to handle live transactions, staff queries and client deadlines. Policies, procedures and historic decisions can all be examined, with inspectors testing not just what exists on paper, but how compliance operates in practice.
HMRC typically request a core set of documents at the outset, including a written AML policy, documented risk assessments, customer due diligence records, PEP and sanctions checks, training logs, audit trails and evidence of ongoing monitoring. They will also probe how exceptions were handled, who made key decisions and whether documentation is regularly reviewed and updated.
EXPOSING WEAKNESS
Inspections frequently expose weaknesses where agencies struggle to justify risk ratings, evidence decision-making or demonstrate that compliance processes are embedded into day-to-day operations rather than treated as a one-off exercise.
Zoe Napier (main picture), Managing Director of The Zoe Napier Group, recently led her business through an HMRC inspection involving detailed submissions and follow-up questions over a defined review period.
“You never know when that inspection is going to come, and the anxiety it can create is mammoth,” Napier says.
UNDER SCRUTINY
She says inspectors scrutinised the agency’s AML documentation and required clear explanations of how risk decisions were reached and recorded.
“They were really impressed with the packs, and with our answers. They were impressed with everything we produced,” she adds.
The Zoe Napier Group used Smart Compliance AML packs, designed to set out risk decisions, supporting evidence and audit trails in a structured format.
COMPLIANCE GUARANTEE
According to the provider, the system maintains audit-ready documentation aligned to how a business operates, with ongoing reviews rather than retrospective file-building when an inspection begins.
Smart Complianc says it supports agents before, during and after HMRC inspections, combining technology-enabled checks with human oversight.
The firm also offers an HMRC Compliance Guarantee, under which fines imposed as a direct result of an error in delivering its managed compliance service are covered, subject to agreed terms and scope.
