Is it money laundering to accept a third party cheque in settlement of fees. The cheque will be posted on clients accounts as credit income and debit accountancy fees so hmrc will not be out of pocket.
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As a minimum you need to understand and record who the third party is and why they are paying fees on behalf of your client. If anything you are told does not ring true do not accept the payment. I do not understand why you propose to recognise the transaction in your client's accounts as a credit to income. What is the nature of the transaction between the third party and your client that you are seeking to account for? Is the client going to reimburse the third party at a .later date? Or is the third party making a gift and if so do you understand why?
So the company has you as a creditor for accountancy fees and another party as a debtor in respect of work done. The company is saying to the other party that it will accept a payment to you on its behalf as a good discharge of the debt due by the other party to the company. It is now asking you whether you will accept a payment from its customer on its behalf as a good discharge of the company's debt to you.
Is there a rational commercial reason for this very roundabout way of doing business. Does your client have banking problems?
Does it matter ?
Is there a rational commercial reason for this very roundabout way of doing business. Does your client have banking problems?
Does it matter?
I might well write a cheque out to pay my wife or my daughter’s debt (and all too often do) – that doesn’t constitute money laundering.
If, for whatever reason, the client wants a third party to pay on his behalf that is his business. Surely the only question the OP needs to ask is – “are these funds the proceeds of crime”? If the answer to that is no, then there is no money laundering involved and he can happily accept payment.
I would simply suggest keeping a note of the source of the funds so that he has the facts to hand in the unlikely event of anyone raising a question about it at some point in the future.
Agreed ... but
Is there a rational commercial reason for this very roundabout way of doing business. Does your client have banking problems?
Does it matter?
I might well write a cheque out to pay my wife of my daughter’s debt (and all too often do) – that doesn’t constitute money laundering.
If, for whatever reason, the client wants a third party to pay on his behalf that is his business. Surely the only question the OP needs to ask is – “are these funds the proceeds of crime”? If the answer to that is no, then there is no money laundering involved and he can happily accept payment.
I would simply suggest keeping a note of the source of the funds so that he has the facts to hand in the unlikely event of anyone raising a question about it at some point in the future.
Agreed but my point is that the absence of a rational explanation for the odd sequence of events may of itself be suggestive that there is some sinister motive.
Have you considered . . .
Have you considered whether this is the ONLY occasion on which the client has had customers of his pay his suppliers?
Could there have been occasions on which this has happened which have resulted in your client's income not being 'picked up' for accounts, VAT and tax purposes?
David
I am with John on this
It is not necessarily a problem but seems rather odd.
Are they hiding income?
Are they avoiding paying judgement debts?
Are they fraudulently preferring you as a creditor?
No not avoiding judgement debts or fraudelently preferring me as a creditor, money probably a bit short in the account. Hiding income in the past from the same source, probably but no proof and if this had not happened it would not have come to light. Cheque had no payee name on it so could be banked by anyone
Oh dear!
If you think that "probably" income from the same source has been hidden in the past then you have to seriously consider a report to your MLRO / SOCA under MLR 2007 / s330 PoCA 2002 because you are saying that you suspect the client has deliberately and dishonestly understated his turnover / profit for VAT or tax purposes.
Or did you mean that probably some monies had accidentally slipped through the net and not been recorded?
David
To david winch
accidentally slipped through as it could have been cash, but i would not like to say how much if any as scrap metal dealers paid out in cash now they have to pay a cheque, the amounts are small under £75