ECSH45025 - Convictions technical guidance
Source: gov.uk (2025-03-10)


No person subject to the approvals process under regulation 26 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), or the fit and proper test under regulation 58 MLR 2017, may act as a business (relevant person), beneficial owner, officer or manager (BOOM) if they have a conviction for any offence listed in Schedule 3 MLR 2017 (https://www.legislation.gov.uk/uksi/2017/692/schedule/3). However, this is limited to unspent convictions - this is set out in the explanatory memorandum to MLR 2017 at paragraph 7.11 “The government will not permit supervisors to take into account spent convictions and cautions when assessing whether a person should be prohibited from being a beneficial owner, officer or manager of a supervised business”. For further guidance on ‘fit and proper’ and the approvals test see ECSH45000 (https://www.gov.uk/hmrc-internal-manuals/economic-crime-supervision-handbook/ecsh45000).

Schedule 3 MLR 2017 lists offences under specific enactments (acts of parliament, statutory instruments, devolved legislation etc) or parts of enactments that mostly relate to fraud, dishonesty, terrorism, money laundering.

Convictions that are ‘spent’ are treated for all purposes in law as though the person did not commit them; nor was charged, prosecuted or convicted/sentenced for the offence.

Legal jurisdictions of the UK

There are three legal jurisdictions in the UK:
- England and Wales
- Scotland
- Northern Ireland
The jurisdictions are distinct from, but related to, government powers devolved from Westminster (the UK Parliament) and have a complex history that leads to the situation where the same rehabilitation of offenders’ legislation applies in England, Wales and Scotland. But while the Scottish government holds devolved powers to set its own rehabilitation periods, they currently align with those of England and Wales. The Welsh Senedd does not have devolved powers to act in criminal justice matters. And different rehabilitation of offenders’ legislation applies in Northern Ireland.

Relevant legislation and rehabilitation periods in the three UK jurisdictions and their relevant legislation

The legislation and full guidance for each jurisdiction can be found here:

England and Wales

Legislation - Rehabilitation of Offenders Act 1974 (https://www.legislation.gov.uk/ukpga/1974/53)

Guidance - gov.uk (https://www.gov.uk/guidance/rehabilitation-periods)

Scotland

Legislation - Rehabilitation of Offenders Act 1974 (https://www.legislation.gov.uk/ukpga/1974/53)

Guidance - gov.scot (https://www.gov.scot/publications/disclosure-periods-previous-convictions-alternatives-prosecution-scotland-under-rehabilitation-offenders-act-1974/pages/1/)

Northern Ireland

Legislation - Rehabilitation of Offenders (NI) Order 1978 (https://www.legislation.gov.uk/nisi/1978/1908/contents)

Guidance - disclosure NI (https://www.disclosureni.com/content-pages/when-will-convictions-be-considered-spent)

Sentences for certain offences and sentences over certain lengths are never spent. The ‘rehabilitation periods’ after which a conviction is considered ‘spent’(treated for all purposes as if the offence did not happen) are, as of August 2024 (for England and Wales, and Scotland) for individuals over 18 years and businesses:
- Sentences of one year, or less, become spent one year after the end of the term of the sentence.
- Sentences between one and four years become spent four years after the end of the term of the sentence.
- Sentences of more than four years now become spent after seven years, whereas under the previous rules, sentences would never be spent.
Offenders who have committed serious sexual, violent or (and most importantly for the purposes of Schedule 3, MLR 2017), terrorist offences, receiving custodial sentences of more than 4 years will never have their convictions spent.

Northern Ireland (NI) has different rules (see link in table below). Changes to the NI rules (to bring them into line with the rest of the UK) are planned but are held up in the backlog of legislation going through the Northern Ireland Assembly (as of July 2024).

What is the impact of different approaches in each jurisdiction on our supervised population?

Where a person has moved from one jurisdiction to another any review of their convictions, and whether they are spent, should be on the basis of the rules in the jurisdiction in which the offence was prosecuted.

Offences committed outside of the UK

Paragraph 35, Schedule 3 MLR 2017 applies the same treatment to equivalent offences committed overseas. Where, an offence equivalent to one in Schedule 3 MLR 2017 has been committed outside of the UK, the law applying in that jurisdiction on rehabilitation periods shall apply.

How do we treat applicants when rehabilitation periods change?

The law should be appropriately applied at the time that the matter (approval or fit and proper test) is being dealt with.

If faced with an approval or fit and proper test for someone who has been previously refused, on the basis of them having previously had an unspent conviction, but rule changes, or time elapsed, mean that the conviction is now spent, we should consider the test in light of the rules in place at the time that the test is being undertaken. We should not proactively notify any formerly refused business or BOOM when their conviction is spent.

What if MLR 2017 Schedule 3 changes?

The list in Schedule 3 MLR 2017 is subject to occasional changes, offences may be added or removed, meaning that we could have:
- Businesses or BOOMs that are no longer covered by the spent conviction rules as their conviction is now spent due to changes in the rules but have been refused in the past.
- Businesses or BOOMs that had a positive fit and proper determination or approval who now have an unspent conviction as the offence they committed now falls under Schedule 3 MLR 2017 and therefore they can no longer be approved or a fit and proper person.
Under such circumstances, the previous decision remains valid. As and when the relevant person or BOOM reapplies or is retested, we will determine the situation in light of the amended list of Schedule 3 MLR 2017 offences at that point.

Extent of Schedule 3 MLR 2017

Only those offences, or types of offences, listed in Schedule 3 MLR 2017 are to be considered as part of the approvals process under regulation 26 MLR 2017. Under regulation 38 MLR 2017 fit and proper test, anyone with an unspent Schedule 3 offence will automatically not be a fit and proper person, but other offences may also be considered in determining if an applicant is a fit and proper person. See also section below: ‘Circumstances in which spent convictions can be considered’.

It should be noted that while most of the offences listed in Schedule 3 are quite specific, some are very broad – notably:
- Paragraph 21: Any ‘lifestyle’ offence in Schedule 2 (England and Wales) Schedule 4 (Scotland) or Schedule 5 (Northern Ireland) of the Proceeds of Crime Act 2002. (https://www.legislation.gov.uk/ukpga/2002/29/contents)
- Paragraph 29: An offence under the law of any part of the United Kingdom consisting of being knowingly concerned in, or in taking steps with a view to, the fraudulent evasion of tax.
- Paragraph 30: Any offence which has deception or dishonesty as one of its components.
Offences under repealed or superseded legislation

Some of the enactments in Schedule 3 MLR 2017 repeal and replace earlier legislation, and care should be taken over repealed legislation. For example, an unspent conviction under the Value Added Tax Act 1983 (which is not in Schedule 3) would continue to be an offence under the Value Added Tax Act 1994 (which is in Schedule 3).

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

Circumstances in which spent convictions can be considered

Spent convictions can be considered but only to evidence a pattern of behaviour under the fit and proper test. While a spent conviction, in and of itself, should not be considered, we may consider the facts which underpinned that conviction. The ruling given in Hussain v London Borough of Waltham Forest [2020] EWCA Civ 1539 clarifies the position and applies to the subjective part of fit and proper determinations: The case concerned a local authority landlord licensing scheme that included a process to determine if a landlord was a ‘fit and proper’ person. The Court of Appeal held that whilst the Rehabilitation of Offenders Act 1974 did prevent the spent conviction being considered, it did not prevent the local authority (Waltham Forest) from considering the facts which underpinned that conviction, in this case dishonesty.