AutoSmart GuidebooksWhat this guidebook covers
Cars are a known way to launder cash. Any business that accepts €10,000 or more in cash, in one payment or linked payments, is a high value dealer and must register with HMRC and follow the Money Laundering Regulations. One cash sale can change a dealer's status.
This guidebook covers 6 AML standards with 18 checkpoints: a cash policy or HVD registration, monitoring linked payments, the risk assessment and policies, customer due diligence, suspicious activity reports, and training and records.
The 6 anti-money laundering standards
Open a standard to see the law behind it, what is checked, what it can cost and the evidence. Ideal fix times are counted from audit submission.
AML-01Cash policy or HVD registrationImmediate
- The law
- Money Laundering Regulations 2017 · Proceeds of Crime Act 2002 · MLR 2017 reg.14 high value dealers (cash of €10,000 or more) · reg.56 registration
- What we check
- The dealership either never accepts €10,000 (about £8,500) or more in cash for a single sale or linked sales, or it is registered with HMRC as a high value dealer and meets all the rules.
- What it can cost
- Unregistered HVD activity is a criminal offence, and HMRC's most common AML fine.
- Evidence
- Cash log + policy
AML-02Linked payments monitored7 days
- The law
- Money Laundering Regulations 2017 · Proceeds of Crime Act 2002 · MLR 2017: linked transactions count towards the €10,000 threshold
- What we check
- Cash payments that are split across deposits, balances or several vehicles for the same customer are added together and checked against the limit.
- What it can cost
- Missing linked transactions puts the business in unregistered HVD territory, with unlimited penalties.
- Evidence
- Cash log
AML-03Risk assessment and policies30 days
- The law
- Money Laundering Regulations 2017 · Proceeds of Crime Act 2002 · MLR 2017 regs 18–19 business-wide risk assessment, policies, controls and procedures
- What we check
- If registered (or at risk of cash sales), the business has a written money laundering risk assessment and policies covering cash, customer checks, reporting and record keeping. Applies when: Registered high value dealers, or businesses accepting cash near the threshold.
- What it can cost
- A registered dealer without controls can face penalties like Harvey Nichols' £175,701.
- Evidence
- Assessment + policy
AML-04Customer due diligenceImmediate
- The law
- Money Laundering Regulations 2017 · Proceeds of Crime Act 2002 · MLR 2017 regs 27–33 customer due diligence and enhanced due diligence
- What we check
- For high value cash sales, the customer's identity is verified, the source of funds is understood, and higher-risk customers get enhanced checks.
- What it can cost
- Missing checks bring unlimited HMRC penalties and possible criminal charges.
- Evidence
- CDD files
AML-05Suspicious activity reportsImmediate
- The law
- Money Laundering Regulations 2017 · Proceeds of Crime Act 2002 · POCA 2002 ss.330–333A failure to disclose, tipping off · nominated officer (MLRO)
- What we check
- There's a named MLRO. Staff report suspicions internally, the MLRO reports to the National Crime Agency where needed, and customers are never tipped off.
- What it can cost
- Failure to disclose: up to 5 years in prison. Tipping off: up to 2 years.
- Evidence
- MLRO appointment + log
AML-06Training and records30 days
- The law
- Money Laundering Regulations 2017 · Proceeds of Crime Act 2002 · MLR 2017 reg.24 training · reg.40 record keeping (5 years)
- What we check
- Relevant staff are trained on money laundering risks, and due diligence and transaction records are kept for 5 years after the relationship ends.
- What it can cost
- Training and record failures are standard penalty findings for HMRC.
- Evidence
- Training log + records
How to run a UK anti-money laundering audit, step by step
- Confirm what applies. Decide whether you cap cash below the threshold or register as a high value dealer; most dealers avoid HVD status with a firm cash cap.
- Walk the site, standard by standard. Score each of the 18 checkpoints Pass, Fail or N/A. N/A only where the standard rules it out, with the reason recorded. Sample cash receipts and look for linked payments from the same customer that together pass the threshold.
- Capture the evidence. A pass counts only with proof captured at the time of the audit: the cash policy, cash receipts, HVD registration if any, customer ID records and training logs.
- Give every fail an owner and a fix time. Record what you saw and who owns the fix. Each standard carries an ideal fix time, from immediate to 30 days, counted from audit submission (see the table above).
- Fix it, then prove it. The site fixes the cause and uploads proof of closure; the auditor checks the proof before closing the finding.
- Re-check at the next audit. Confirm closed findings stay closed, and look for the same fail at your other sites so one gap doesn't repeat across the network.
Who this guidebook is for
- Dealer principals
- Finance and sales managers
- Compliance officers
- Auditors
A reference document, not legal advice. Fines and rules change: check the current text with the regulator or your legal adviser before acting.
