Sivarajah v Revenue and Customs (MONEY LAUNDERING REGISTRATION - penalty - Regulation 76 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017) [2026] UKFTT 649 (TC) (29 April 2026)

Executive summary

The First-tier Tribunal (Tax) dismissed Mr Sivarajah’s appeal against an HMRC civil penalty imposed under Regulation 76 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The tribunal accepted HMRC’s evidence and concluded that he had not taken all reasonable steps and exercised all due diligence to ensure compliance with the registration requirement, so the penalty was confirmed.

Key points

• Appellant: Sellathamby Sivarajah; Respondent: HMRC
• Issue: penalty for trading while unregistered under the Money Laundering Regulations
• Holding: appeal dismissed; penalty confirmed
• Reasoning: tribunal found he accepted he should have been registered from 1 April 2022, but his mistaken reliance on HMRC guidance and conversations did not satisfy the 'all reasonable steps' / 'all due diligence' defence
• HMRC’s penalty calculation followed its published Penalties Framework, with reductions for voluntary application and prompt payment
• Sanctions/export-control angle: the case sits within the UK anti-money laundering / terrorist financing supervisory regime, illustrating enforcement for non-compliance with registration duties

Why it matters

The decision shows HMRC’s willingness to enforce AML registration failures through civil penalties, even where the business is small and the respondent acted pro se. For sanctions and national-security risk audiences, it is relevant because the underlying regime is expressly tied to money laundering and terrorist financing supervision, and the tribunal treated guidance-based misunderstanding as insufficient to avoid liability.

Implications

Compliance teams should not rely on informal advice or partial readings of HMRC guidance when determining whether AML registration is required; the tribunal’s approach underscores the need for documented, sector-specific legal analysis. In litigation, the key defence under Regulation 76 is evidencing both reasonable steps and due diligence, so appellants will need contemporaneous records showing active verification of registration obligations and supervisory status.