An island-based payroll agent has been fined £33,850 by the regulator.

This takes the number of fines handed out by the Financial Services Authority in the past 12 months to £3,011,385.

The FSA deemed it ‘reasonable, proportionate and appropriate’ to impose the £33,850 civil penalty on Income Plus Services Limited.

An investigation identified a number of breaches of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) code.

The civil penalty of £48,356 imposed on IPSL was discounted by 30% to reflect the fact that the company had co-operated with the regulator and agreed settlement at an early stage.

In a public statement, the FSA described IPSL’s contraventions as ‘systemic’ and showed that the company had materially breached the code over a long period.

It said that IPSL’s failure to maintain adequate AML/CFT procedures and controls had made it more vulnerable to being used for money laundering.

The investigation concluded that the payroll agent had not carried out an adequate assessment of the risk of its customers and could not demonstrate that it was at all times taking reasonable measures to verify the identity of new customers.

There was no ongoing monitoring or screening of customers to check for exposure to sanctions, PEP (Politically Exposed Persons) or adverse information.

The FSA noted: ‘Ongoing monitoring of customers helps identify and mitigate potential risks.

‘By continuously reviewing client activities and transactions, firms can detect suspicious behaviour early and take appropriate action.’

IPSL, registered at the Mountain View Innovation Centre in Ramsey, supplies invoicing, payment and administration services to contractors including self-employed hospital doctors, largely within the UK NHS.

In 2021, the company lost a high court appeal over a £2m VAT bill.

A tribunal had ruled in favour of Customs and Excise that services had been wrongly treated as exempt from VAT.