What is the “fit and proper” test?
A – Local Authorities are not obliged to make direct payments where they are not satisfied that the landlord is a ‘fit and proper person to be the recipient of a payment of rent allowance’. This will apply even when the criteria for a direct payment would otherwise have been met. A landlord may not be a ‘fit and proper person’ where it is proven that they have engaged in financial impropriety. This should normally include an element of HB impropriety, such as fraud or a knowing failure to declare changes in circumstances affecting the payment of benefit. Authorities may choose to consider other areas, such as a failure to pay Council Tax or business rates, but generally the lesser the connection that the offence or impropriety has with Housing Benefit, the less relevant it will be.
A fit and proper test will be applied to those who effectively run, or are beneficial owner, of a money service business or a trust or company service provider. The test will check individuals against a number of objective criteria set out in the new Money Laundering Regulations. The intention is to deny the riskiest individuals access to the Money Service Businesses (MSBs) and Trust or Company Service Providers (TCSPs) sectors. HMRC will perform these checks at registration using an array of internal and external information sources. If any of these criteria are met, HMRC will have to refuse the application.
