Money Laundering Regulations: if you provide accountancy services, book-keeping, or tax advice and you are not a member of a Supervisory body recognised under the regulations you must register your business with HMRC.

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017/692 replaced the Money Laundering Regulations 2007 with effect from 26 June 2017.

HMRC operates a risk-based approach to its supervision of MLRs and will use information to find any Accountancy Service Providers (ASPs) that have not registered.

Accountancy Service Providers include accountants, auditors, tax advisers/consultants, bookkeepers, payroll agents, and customs practitioners.

Supervisory bodies include the:

Under the regulations the ASP will need to appoint a relevant person to take responsibility for the following (non-exhaustive):

  • Creating, regularly reviewing and updating policies and controls to mitigate or manage risks of money laundering
  • Communicate with the rest of the business what those policies and controls are and monitor compliance with these.
  • Screen staff and check competencies and integrity.
  • Establish money laundering audit functions.
  • Ensure that employees are trained in the policies and controls.
  • Record in writing all of the above.

This person will need to be approved by the supervisory body as a 'fit and proper person'.

What's new?

HMRC have opened a new consultation “Discussion Document on HMRC’s anti-money laundering supervision fees". This proposes various different options for new fee structures for registering with HMRC. The consultation closes on 28 September 2018.

Penalties

From 1 April 2010 HMRC imposes sanctions on businesses which have not registered under the Money Laundering Regulations.

  • The late registration penalties policy applies to Money Service Businesses, (MSBs) High Value Dealers, (HVDs) Trust or Company Service Providers, (TCSPs) as well as to ASPs.
  • Should a business fail to register with HMRC when it is required to it will be liable to a fixed penalty and any unpaid fees.
  • The late registration penalty will be based on fixed penalty and any unpaid fees.

Prosecution of Trust of Company Service Providers and ASPS

  • From 01 April 2010 Trust or Company Service Providers and ASPs who have not registered with HMRC will be liable to a penalty or prosecution.

Links

Money Laundering Checks: know your client

HMRC late registration penalties

Cases

In Munatsi Logistics Ltd v HMRC TC0653, the First Tier Tribunal rejected an appeal against HMRC’s decision to refuse the appellant registration under the Money Laundering Regulations 2007.

In Michael Hunt v HMRC TC04183the First Tier Tax Tribunal (FTT) considered what is meant by the term “fit and proper person” for the purposes of registration under the Money Laundering Regulations 2007.