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What is the approval check?

Approval checks are conducted by HMRC to ensure that an applicant, and its beneficial owners, officers and managers (BOOMs) are suitable people to carry out those roles.

BOOMS of the sectors below must undergo an approval check and pay the business must pay the relevant fee:Ìý

• Art market participant (AMP).
• Accountancy service provider (ASP).
• Estate agency business (EAB).
• High value dealer (HVD).
• Letting agency business (LAB).

A business may trade whilst the approval check(s) are outstanding but will not be added to HMRC’s register of supervised businesses until its application has been approved.

What to establish

It is important that all officers and/or persons with significant control (PSC) shown on Companies House (CH) are notified in the registration information in order that everyone who is controlling the business is checked.Ìý A PSC is shown on CH where they have more than 25% of the shares and/or voting rights.Ìý Any person with more than 25% of the shares or voting rights is a beneficial owner (BO).Ìý

If there is a business that owns or controls the business you are reviewing, you will need to determine if there is an ultimate beneficial owner (UBO) and that they have been notified to you.Ìý If there is a chain of companies that own the business you are reviewing, all BOs of the business that owns or controls the business you are reviewing are also classed as BOs of the business you are reviewing through this indirect control.Ìý

Whether there are any individuals, or other businesses, showing as officers and/or persons with significant control (PSC) on Companies House that have not been notified in the registration information.ÌýÌý

A check against CH records or FAME records can be done and compared with the latest registration details HMRC holds to ensure the business has declared all of its BOs and officers to HMRC, including UBOs from any holding or parent company.

What is checked?

Authorisations decision makers (DMs) will contact Risk and Intelligence Service (RIS) to request a check of a business and its BOOM’s criminal record. If an unspent Schedule 3 conviction is identified, the business or BOOM must fail the approval check. Further guidance on Schedule 3 convictions is available in ECSH45025.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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Outcomes of approvals check

• If the business passes the approvals check the DM will approve the application. The relevant person will receive a secure communication via its government gateway account to advise that its registration has been approved.
• If a sole proprietor fails the approvals check the DM will refuse the application on and write to the sole proprietor explaining that their application has been refused.
• If a BOOM who is applying as part of a firm fails the approvals check the DM may refuse the application and write to the applicant explaining that their application has been refused. DM discretion can be applied, and the applicant can be issued with an intention to refuse letter requiring the BOOM be removed from the businessâ€� registration, otherwise its registration will be refused.

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