Response back from HMRC regarding my earlier lack of knowledge regarding registration:
Quote "Thank you for your e-mail below in relation to the ‘Penalty Warning’ letter issued to you on the 26/07/11 for the total amount of £304.16.
I’m afraid registering late and being unaware of the deadlines in which to register is not a reasonable excuse for me to cancel or reduce the penalty. The Money Laundering Regulations 2007 were well publicised at the time they came into existence and it was possible to get information on the HM Revenue and Customs website www.hmrc.gov.uk/mlr. If you had viewed this site you would have seen when you needed to register. In addition to this as many accountants and tax advisors are supervised by the professional body of which they are a member, we decided it would not be appropriate or cost effective to write to every accountant/tax advisor, as most would not be required to register with HMRC. The most efficient, appropriate and cost effective form of communication for HMRC was/is a combination of publicity campaigns (VAT notes, HMRC Agent updates, attendance at educational events and presentations to customers).
The HM Revenue & Customs website provides detailed information on the Money Laundering Regulations and who is required to register. If you are providing accountancy services which include “recording, reviewing, analysis, calculation or reporting of financial information” and/or if you are also deducting national insurance contributions, income tax, etc then you would fall into the definition of an ASP. This means that even if you do not actually handle cash for your clients you still fall under the scope of the regulations therefore you are required to register for Money Laundering purposes as an Accountancy Service Provider.
For further information on registering with HMRC for the Money Laundering Regulations, including business sector guidance can be found on our website at the following addresses: hmrc.gov.uk/mlr/detailed-guidance.htm There is also a VAT, Customs & Excise helpline on 0845 010 9000 for general enquires.
If you are unclear about any of the matters I have raised or need further help please contact me with your concerns and I will try to resolve them with you." Unquote
Fortunately, my accountant advises that I can claim the £204.16 back fees as expenses but will have to pay the fine as a non-expense.