MLR - do I have to SOCA report a historic misbehaviour?

MLR - do I have to SOCA report a historic...

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I have been registered under the MLR with the Revenue since the start of 2009.
Am I obliged to report something done by a client before this date?
The situation is that she went over the VAT-reg threshold for a time in 07/08, and did not notify HMRC despite my guidance on this. I have only just found this out.
Assuming she was below the de-reg threshold before I was under MLR (this still needs to be checked) am I free from the obligation to report?
If not, do all historic crimes need to be reported?!
Help much appreciated. This is the first incident I have to consider.
Sylvie

Replies (5)

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By steveoneill
19th May 2009 16:28

Training and other services
Hi Sylvie

I hate advertising here but..................

Try the link below, lots of good stuff to help the smaller practitioner

http://btc-nw.co.uk

Steve O'Neill
Business Tax Centre Ltd

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By User deleted
19th May 2009 13:16

feedback from my question
Thank you all three for your comments - I see there is no wriggle room.
Thanks Stephen for the legal history of it.
Panda: the HMRC just takes the registration money and runs. Nothing is sent out, there is no helpline that has more than the barest understanding, and their e-mail help service doesn't answer. It's not my definition of supervision.
Yes, I will do some training.
If anyone can recomend a training provider for the small business, that would be useful. They mostly seem to be aimed at big firms with an MLRO etc.


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By steveoneill
18th May 2009 13:39

Beware Possible Parallel Breach of Regulations
There are a number of issues here; firstly you have only been registered for supervision for ML Compliance since 2009 which is the last moment you could have registered without committing a criminal offence yourself, however this compulsory registration requirement is a part of the 2007 Regulations commencing 15 Dec 2007 and if you where in business before this date you were also covered under the 2003 Regulations where you would also have been obliged to have AML systems in place even though you may not have had a supervisor. The obligation to report comes by the way of business to report the actions of someone who IS engaged in money laundering.

So in simple terms if you commenced in business after 15 Dec 2007 you were obliged under the Regulations to report information of a suspicious nature coming your way by the way of business, even if this was before 15 Dec 07 and the start of the offence was prior to this. It is now you dealing with those affairs

The bit you do not explain is, has the client now followed your advice and agreed to straighten out their affairs with the Revenue and repay any outstanding VAT and penalties? If they have, they are not now actively engaged in money laundering, only in a technical sense, and a further disclose report of something fully declared to an officer of HM Customs (exactly as PoCA tells us to report) would not be in the public interest. If however they still have not followed your advice which would indicate a level of intent from what you have told us, you should consider filing a SAR.

Another issue that raises its head is your relationship with the client. If they are just repeatedly not following your advice and doing what they please, it may be just possible that all they want from you is your name lending a level of legitimacy to their otherwise legitimate actions. Only you know the answer to this.


Steve O'Neill
Business Tax Centre Ltd

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David Winch
By David Winch
18th May 2009 13:37

The short answer . . .

The short answer to your question is "Yes" - you are obliged to report earlier misbehaviour.

There is a technical legal point as to whether you would be required to report something which occurred prior to March 2003 - but for practical purposes I think we can ignore that!

Of course you need to have a suspicion of a crime - not merely a negligent failure. However you do mention that you advised the client at the time regarding registration, so your suspicion is that her failure to register was deliberate (and therefore criminal). If, in the event, registration was not required then, of course, there is nothing to report.

David

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By User deleted
18th May 2009 13:26

MLR
Yes you should make a disclosure about your customer's continuing failure to register for VAT but first of all find out all of the relevant facts.

You know she is obliged to register but do not have any details about whether she should now deregister from VAT or indeed if one months turnover was a blip and there was no obligation to register. Assumptions are the mother of all catastrophes and are not considered to be facts. Find out these details first before you make the disclosure. You cannot tip off your customer to tell them you have done this. You may find out there is nothing to report.

On a seperate issue, Did HMRC provide you with your duties and reporting obligations when you registered with them? I do not know the answer to this and i am not attempting to score points etc., I am registered via a professional Institute so have had no requirement to go down this route? Only curious to know what (if anything) HMRC have provided as a guide for those who are registered with HMRC.

If no guidance has been provided then I would reccommend you arrange to go on a course quite sharpish to learn more about MLR and your obligations.

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