MLRO query

MLRO query

Didn't find your answer?

Hypothetically of course. If I have clients who are behind on their PAYE due to cash flow difficulties (can be a common occurence I suppose) yet they have the intention to pay, are making arrangements to secure finance to pay, would I need to report to NCIS? Obviously even a months worth of PAYE/NI can be significant.

Secondly, if new self employeds come along who haven't registered or paid any tax for 2 years or so, I guess this would be immediately reportable? What if they have asked me to sort it out and make a small payment on account subject to finalising the accounts and computations and I write to the IR and explain the situation? Still reportable?

Any comments would be very welcome.
Anon

Replies (3)

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Acc
By jonock
20th Oct 2004 10:17

Late Paye a reportable event?
Although I agree with the previous comments, I have asked the same question on a training course in the last week. The speaker was an ex-NCIS employee and he said that the safest option was to report on a limited intelligence value form, stating the reason that you thought it to be of limited value was that you had or were going to disclose to the Revenue and bring the matter up to date.

However, where vat is involved you should always report.

Hope this helps.

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David Winch
By David Winch
20th Oct 2004 20:05

Not the best training . . .

Joanne

You are not going to the best training courses!

Whilst at NCIS the trainer would have been instructed not to give such advice because (i) NCIS should not advise callers whether or not a report is required, and (ii) NCIS staff do not necessarily have the appropriate knowledge, training, skills or experience to enable them to advise.

Probably what the NCIS man had in mind was that he was unsure whether or not late payment of PAYE was a criminal offence but he had heard that submitting an incorrect VAT Return (even unintentionally) could constitute a criminal offence.

But he overlooked s 340 PoCA 2002 and in particular the definition of criminal property (and indeed the NCIS guidance notes on the LIV form).

A report is not required unless a crime is suspected and it is known or suspected that the alleged offender himself knows or suspects that that there exists a benefit of a crime.

To put it more simply, if the person you suspect of money laundering himself genuinely believes he has done nothing wrong, there is nothing to report.

(The problem arises in determining what the person whom you suspect does genuinely believe!)

So a wholly innocent error or omission in relation to income tax or VAT need not be reported to NCIS.

Of course, there is nothing to stop you submitting a report which is not actually required, if you wish to do so. This guards against the possibility that you are mistaken, and that a report is required, and that you could become at risk of prosecution for failing to report.

David
[email protected]

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David Winch
By David Winch
11th Oct 2004 19:13

Already answered this one once . . .

Anon

I have already answered this once - but the answer got wiped by AWEB (because the question had been duplicated)!

Whilst possible interest charges or penalties (under s 7 Taxes Management Act 1970, for example) may arise for late payment of PAYE / late notification of chargeability, the likelihood is that neither matter is a crime.

If the failure is merely negligent it is not criminal (there may be an exception to this rule in certain VAT cases, but that does not apply to this question).

If there is no crime then there is no 'criminal property'.

If there is no criminal property there can be no money laundering.

If there is no money laundering there is no need to report to your MLRO / NCIS under PoCA / MLR.

If however the late notification was dishonest then it may be in contravention of s 144 Finance Act 2000, or common-law, which is a crime. In this event the tax 'saved' is criminal property and a report to your MLRO / NCIS is required.

For an extended discussion of a similar point see NCIS reportable.

AccountingWeb has produced a money laundering CD aimed at helping you understand the money laundering legislation and ensure your compliance - further details are available here.

If you are an MLRO you can get confidential one-to-one email support, information and NewsAlerts from my website www.mlrosupport.co.uk.

David
[email protected]

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