The UK Government has announced it will overhaul its anti-money laundering regulations for professional and business services firms by the end of 2025, aiming to make the rules clearer and more proportionate to risk.

The move is part of a broader strategy to support the £300 billion (about $412 billion) PBS sector, which includes law, accounting, consultancy, architecture and other high-skill services. The government says these firms are vital not only to the UK economy but to its reputation as a trusted global business hub.

Under current money laundering regulations, PBS firms must carry out rigorous checks to verify their clients’ identities and ensure they are not facilitating money laundering or terrorist financing. However, firms have long complained that the rules are overly complex and burdensome, particularly for smaller operators and those working with emerging technologies.

“Know Your Customer and [AML] requirements are seen as a major burden to PBS firms," the government said in its report, promising reforms that balance risk with ease of doing business.

HM Treasury plans to release a package of changes to the MLRs later this year. These may include new guidance and the promotion of digital identity tools to streamline identity checks and reduce costs.

The initiative aligns with the government’s goal to cut regulatory red tape by 25 per cent by the end of this Parliament, and ensure the UK remains a top destination for global business and investment.

The complete plan can be viewed on the UK Government’s website.