Money Laundering Registration for book-keepers.

 There was a recent article in the Sunday Times regarding the need for self-employed book-keepers to be registered with HMRC for each client they have. I currently have two clients. Do I need to get registration for each of them? At £120 each, that seems a bit steep to me. Can I pass the cost on to the client? I read all the blurb on the HMRC website and found it a bit confusing.  At first it seemed to me that it was only meant for companies who set up other companies (that's not me). Then I read a bit more and thought it may be for small self-employed book-keepers like me for our own protection? but all that I read just made the whole thing more confusing.

 

Please could someone clarify the situation for me? Neither of my clients has dealings with foreign countries so I feel sure that there is no problem in that direction, but I am hoping to expand my client base and take on staff so I do need to be clear about this.

I know that if I belonged to the International Association of Book-keepers, I would be covered by their umbrella, but I don't. I have recently applied to them, but my qualifications are with R.S.A. and they may want me to take their own exams.  That seems a bit like overkill to me.

 

Any help and advice appreciated.

 

Star

 

Comments

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davidwinch's picture

It's the business that registers

davidwinch | | Permalink

Hi

It is your business that is required to register (just once!) with HMRC.  You pay a fee for each office from which you operate your business - but for the vast majority of accountants / bookkkeepers there is only one.

The fee is an annual one.

It's not directed towards dealings with foreign countries - it's directed towards any connection with proceeds of crime.  Since tax evasion (involving dishonesty) is a crime then that could relate to your clients.  So, for example, could mortgage fraud (if they give false information on a mortgage application), theft (if anything is stolen from one of your clients), etc., etc.

Hope that helps.

David

http://www.MLROsupport.co.uk

 

No overkill with professional recognition

garrycarter | | Permalink

HMRC was appointed as the default regulator under the Money Landering Regulations (MLR).  In other wrds, HMRC is there to swallow up those bookkeepers who have not been able gain membership of one of the professional bodies that were appointed as Supervisory Bodies under the MLR.

But being a member of a recognised professional body says a lot more about you as a bookkeeper than that you are covered for MLR - it says that you have qualified for your membership and, above all, that you have the support of a professional body behind you if anything goes wrong.  This is added security for you and your clients. 

Whether you decide to join the IAB, AAT or Institute of Certified Bookkeepers (ICB), just make sure that you have access to technical, legal and MLR advice from someone who knows what they are talking about.  The level of service varies between the bodies so you need to make sure that you join an organisation that suits you.

The main point of the MLR is that you Know Your Client.  You need to think outside the box and make sure you understand fully what your client does, not just the bit that you get involved with.  Bookkeepers have a pivotal role in ensuring that clients do things properly.  Good luck.

STAR181270's picture

Money laundering registration

STAR181270 | | Permalink

 Thank you both for your good advice. It is very good to hear it.

 

Best wishes, Star

Book yourself on a course

Anonymous | | Permalink

As you appear to be in charge of your firms money laundering reporting obligations. I suggest you book yourself on a course as soon as possible as you and all your staff will be required to show they have had training in this area.

Vat errors and undeclared income (eg cash jobs) are also reportable money laundering offences, it is therefore quite likely that you will at some point in your business life need to report under this legislation.

Failure to report = up to five years inside

Assisting with the bookkeeping (covering up) = up to 14 years inside

Failure to check client identities = up to 2 years inside

So quite serious really.

There is some useful information on the SOCA website.

davidwinch's picture

Steady on . . .

davidwinch | | Permalink

I speak here as a person with a self-interest in money laundering training - but I think the previous poster goes too far in his references to long terms of imprisonment!

A person who is deliberately dishonest deserves some bother from the authorities - and there are penalties in existence for that.

But I assume the original poster here is basically honest and trying to do the 'right thing' - even if a bit fuzzy as to exactly what that entails.  The OP probably is in considerably greater 'danger' of scooping millions on the National Lottery than going to prison!

However there is a requirement to get to know what the Money Laundering Regulations 2007 require and to put them into effect.  Key elements of that involve some training (not necessarily by physical attendance on a training course), putting into operation CDD (client due diligence) procedures, and an awareness of the need to report suspicions of money laundering.

It needs to be dealt with - but 'porridge' is not on the horizon!

David

http://www.MLROsupport.co.uk

sorry David

Anonymous | | Permalink

but.... the legislation does contain quite strong wording and I am not sure that a HMRC official would give the rules the same sunny spin. I appreciate that they cannot possibly lock everyone up so the chances of being prosecuted are negligible.

Is it not time to admit that large swathes of the accountancy profession are not even aware of this legislation let alone complying with it. Not only rendering it ineffectual but also a commercial disadvantage to those that actually comply.

Are you saying that if we are ignorant of the law, but essentially honest then this legislation does not apply to us?

Am I really allowed to take a common sense view? (e.g. I thought the crime to small to report or that I knew the authorities would not really be interested, or ten other accountants do the same or any other excuse an honest person would use)

Sorry to be obtuse, (I do not intend to be disrespectful) but all of the money laundering courses I attend, make great emphasis of the criminal sanctions otherwise who would bother with the course or the rest for that matter ?

I am sure I am not the only honest accountant who finds these rules an attack on my professional integrity.

Perhaps, I really need to stop worrying about this legislation.

STAR181270's picture

Money laundering legislation.

STAR181270 | | Permalink

Thank you both for your continuing comments. I am pleased to be learning more and more about this subject.  I was in America during 2007 and came back to find all sorts of changes had been happening, e.g. Companies Act 2006, money laundering legislation and there are probably others I am unaware of.

First let me say that I am totally honest in all that I do. If I make a mistake, it is not a deliberate one and I expect my clients to be the same.  However, as book-keepers we can advise clients, we cannot insist that they do things in a certain way and I would hate to have to report anybody when the error could well be a real one.

Getting back to my original question David, I am still a little fuzzy as you delightfully put it. I have a Limited Company, so would it not be better to register with the HMRC for the money laundering. That way it would be my company office that was registered.  If I belonged to a professional body, then I think it would only be me that was registered and not any other staff I may employ through the company? What is your opinion on that?

Once registered, what do I actually have to do with my clients to ensure that they are not 'making errors'?

Thank you so much for your continuing support in this matter.

Regards, Star

 

STAR181270's picture

Money Laundering Legislation

STAR181270 | | Permalink

http://www.financialdirector.co.uk/accountancyage/news/2255779/former-acca-president

 

In response to Garry's comment on my not belonging to a 'Professional Body', I don't know if I want to be when I read articles like the one above,  with regard to D. Yeates and co. see link!

Trust yourself!

Regards, Star

 

Limited liability for MLR officers

garrycarter | | Permalink

I do think that talk of prison sentences are perhaps a bit of overkill.  This is not to say that a bookkeeper can just say "I did my best" if it all goes wrong.  A bookkeeper who misses a fraud or other deceipt will need to prove that he or she took all reasonable measures to comply with the MLR requirements and to ensure that his or her client did not commit such actions.  Any prosecutor will expect to ask the question "was it reasonable, given the circumstances, for this bookkeeper not to have known that the fraud was taking place?"  If the bookeeper has carried out MLR risk assessment and due diligence and has completed the financial records of the business in a proper and businesslike manner, he or she should feel confident that a prison sentence is unlikely.  However, the bookkeeper should certainly not turn a blind eye to anything and should certainly not do what the client is asking if, in their professional judgement, it is incorrect or illegal.

My concern having read the emails is that you may not be clear enough about what you need to do and simply registering with HMRC will not be good enough for your own peace of mind.  The Serious Organised Crime Agency (SOCA) I believe have now finished their seminar programme and some commercial semnars are very expensive and are not profession specific.  Knowing how Banks handle this is not what you need.

The ICB, for example, run refresher seminars in thirty towns and cities each year and also provide all members with a full MR manual and instructions.  Thisd might be better for you.

I am from the ICB so I need to declare my interest.  Other organisations will tell you what they can offer.  But whichever orgsanisation you decide to link into, I think you need some urgent clarification before you get something wrong.

Please don't just take my word for it as I am obviously biased - but you do need to get it right.

davidwinch's picture

Registration

davidwinch | | Permalink

Technically it is the business that registers.  So if you are a sole trader and register yourself the registration covers all the fees 'you' (i.e. the sole trader business) earn.  So if you have employees then they are covered by your registration in respect of the work they do for you.

Similarly if you have a limited company then it is the limited company which is permitted to practice by your professional body.  It is the limited company which describes itself as "Chartered Accountants" or whatever.  So again work done my employees for that company is covered.

With regard to "errors" let's be clear.  An innocent error made by yourself or your client which results in an underdeclaration and underpayment of tax or VAT - and which is corrected reasonably promptly upon discovery - does not involve any dishonesty.  Since it does not involve dishonesty it does not trigger a need to report under MLR.

On the other hand a DELIBERATE "error" (which should not properly be called an "error" at all since it is an intentional mis-statement) which results in an underpayment of tax or VAT does involve dishonesty and is reportable.

The formal legal logic to arrive at that (common sense) conclusion is a bit complex - but trust me, I'm an accountant ;)

David

I agree

Anonymous | | Permalink

There are distinct advantages to not being a member of a professional body.

No need for PI cover. (in reality this means that you will never get sued)

No subscription fees.

No difficult exams.

No one to discipline you, and fine you.

The general public know no different, so it is not even any use for marketing.

No need to keep on investing in keeping up to date.

A Quicker and less expensive route to success.

and less likely to be hung out to dry as an example, poor old Dennis commited an inexcusable offence but the subsequent trial and conviction seems to have been more about revenge for an outdated religious concept that you are only allowed one woman. Was he even in his right mind ? anyone who pretends to go to work because they cannot face up to loosing their job, must be having some form of breakdown, and perhaps Dennis needed help.

The term accountant is not protected so you can still refer to yourself as an accountant.

Dangerous advice

garrycarter | | Permalink

I am completely at odds with the last comment:

  1. Just because you don't have PII cover it does not mean that you will not be sued - only that you will not have insurance to cover what you are sued for
  2. You still have to pay HMRC £120.  Admittedly the fees to a professional body will be higher but, in most cases, only about £20.00
  3. I agree you will not need to sit exams - but if you know what you are doing why should you be worried about proving it?  And you only haver to sit them once.
  4. Be in no doubt - HMRC will fine.  They say up to £5,000 plus 10% of gross turnover
  5. The general public are not as daft as you think. 
  6. Apart from the annual fees there is no need to pay anything else to keep up to date
  7. Quicker possibly but at what price success?

Some of these comments are dangerously missleading.  Be careful.

STAR181270's picture

Money Laundering Registration for book-keepers

STAR181270 | | Permalink

 I agree I have to be careful - careful that I don't spend out more in professional fees than I actually earn! LOL

I passed my exams in the early 1970's, RSA mainly and I've done lots of courses since in Sage, Quickbooks etc. etc. Do I really want to take any more exams? Why aren't my existing qualifications good enough to belong automatically? I have a wealth of practical experience gained over many years.

I suggest that the main reason for the professional bodies wanting someone to retake exams is to get the revenue involved in doing the course and taking yet more exams.

Now to specifics regarding the reporting of a client's (potential)  fraud. I would ask you'all a few questions.

Is there anyone here who hasn't paid a builder or a plumber cash for a job done in their house?

Is there anyone here who hasn't ignored the fact that the 'shop' has omitted to give you a receipt for something you've just bought?

and what about the petty cash tin? As a book-keeper I pay attention to detail. It seems to me that quite a bit of money is 'lost' in the petty cash tin.  Is it really reasonable to call the client to task over the fact that the petty cash tin is £5 short? What do you do if they say that so and so lost the receipt or can't find it 'yet' or that they will return the money when they've got some change? Is that scenario really any different because it is £5 to if it were £5 million? Should we, as book-keepers report these clients who 'lose' a fiver now and then?

I don't mind a bit going on courses. I go on as many as I can if they're free, like the recent v.a.t. course I went on provided by Business Link (can I hear clapping?) but when there is a great cost involved, I have to look and see if I can afford it.

Thank you for your continuing support.

Regards, Star

 

 

 

 

 

Last stand

garrycarter | | Permalink

I think it's a bit unfair that you say revenue is the only reason that professional bodies want you to sit their entrance exams.  The reason why professional bodies require up-to-date examinations is quite simply because we cannot take it for granted that you can remember something that you were taught years ago.  Of course you may well have done but we need to be sure.  As you have only two clients it is unlikely that you will be doing on a regular basis everything that you learned in your training, so will have forgotten some things.  I'm sure you wouldn't want to be operated on by a surgeon who had not updated his or her skills for the past decade. 

You are not expected to take a course, unless you need to revise, only to sit an examination to prove that you are still competent.  A bookkeeper provides a vital service to businesses, the directors of most of which know little or nothing about a set of accounts and who therefore rely completely on the bookkeeper.  A bad bookeeper can ruin a company.

As far as the amount of money being laundered is concerned:  Where do you draw the line?  In Law there is no de minimus.  Dare I say that if you have a professional body you would check with them on an individual case basis.  as aThe point is that there should not be any grey areas.  Wrong is wrong. And bookeeper you will be treated much like a policemen who is found guilty of an illegal act - you should have known better and will be treated more punitively because of this.

The MLR requirements are really not too onerous at all for 99% of busineses.  Risk assessements and due diligence are a bit of a nuisence at the beginning but then take up very little time.  ost clients don't have a problem with this as the Bank and most other organisations have already asked for exactly the same information.  However, occasionally a bad client pops up and you need to be able to identify this and deal with it accordingly.  You will probably have a good gut feeling about the client already.  Now, because of the MLR, you can't look the other way.

It's about being professional.

Hope all this has helped you make an informed decision.

I can't believe

Anonymous | | Permalink

Some of the items posted to this thread!  The MLRs are with us whether we earn enough to learn about them are not.  Sometimes I'm in a rush to get somewhere but I would ignore speed limits at my peril.  Other postings highlight the different views/approaches taken by professionally qualified and non-qualified service providers to excellent effect!!!

Old Greying Accountant's picture

Is it any wonder people don't want to pay tax...

Old Greying Acc... | | Permalink

... when a lottery winner who blows £10million in 8 years can go and claim benefits?

Better to treat the cause than the symptom!

STAR181270's picture

Money laundering registration

STAR181270 | | Permalink

I would like to thank everyone who contributed to this thread for the helpful advice I have received, especially David Winch.

Regards, Star

What cost MLR

garrycarter | | Permalink

Great idea but if you are regulated by the ICB you get the manual, the policies, the guidance and all the forms for free.  The registration is £70.00 per annum.  Bargain or what?

checks only

georgeford | | Permalink

 Hi there, 

If you only want to pay for the checks try www.veriphy.co.uk 

Free to sign up, free support, no min use and gives you access to credit checks, automated valuations, company checks, driving licence checks and a few more from the one login. 

Pay as you go model. 

Cheers 

George

STAR181270's picture

Helpful, thank you

STAR181270 | | Permalink

 Lots of useful help and advice.  Thank you people!

Keep it coming.

 

 

 

Star

Money Laundering for book Keepers

Carolynne | | Permalink

I have provided book keeping services since 2004, as an AAT member in practice.  It was recommended to me quite early on, to purchase a 'Money Laundering for the Small Practitioner's Procedure Manual' from a company called practice growth.  their email is info@practicegrowth.co.uk.  

The manual is updated annually to comply with current legislation, there are standard forms for use, when taking on a new client (of what information you need to sight and copy for the file), also training for staff can be given from this manual.  Reading the manual updates also adds towards your continued professional development.  It is available in CD format £91.65 including vat or in paper format, and once purchased the updates are at a lesser fee per annum.  Their phone number is 0161-928-8686.

Something else I would mention is that whenever I provide services, it is always wise to state that the work you have prepared, is in accordance with the information supplied by the client.  -- Carolynne

Can't blame the client

garrycarter | | Permalink

Sorry but just because the client gave you the information it does not mean that you are dissolved of responsibility.  It is now your duty to check the information and make sure it is correct.  In MLR terms is comes under Know Your Client (KYC).

?? check information given by client??

Anonymous | | Permalink

I assume, hopefully, that you are referring to the ID checks, and not the bookkeeping information.

How can we possibly check every that every piece of information given by the client is correct, and if it were possible, would the client (or HMRC) be willing to pay? Even an audit would not guarantee 100% accuracy. Who can prove that cash purchases (for fuel maybe) were made by the actual client? We can do standard checks, but cannot check every piece of information.

The final responsibility has to remain with the client, otherwise they have carte blanche to do whatever they like and blame the accountant for not spotting the 'error'.

The Devil is in the detail

garrycarter | | Permalink

I agree - except that uner the MLR you have to make reasonable checks and cannot accept information given to you just because the client says it is correct.  In other words, if the client is deliberately trying to fool you there is probably no way that you will be able to pick this up.  However, you cannot any longer merely do as you are told and any subsequent enquiry might ask if you should, under normal circumstances and as a qualified person, have seem what was going on.  It's another grey area but is designed to stop the bookkeeper turning a blind eye because they need the client's business.

Where in the ML Regs does it state

Anonymous | | Permalink

" you have to make reasonable checks and cannot accept information given to you just because the client says it is correct"?  The regs simply require client due diligence and to report where necessary, perhaps obtaining permission to act in certain circumstances.  I accept that our professional duty requires us to make sure the facts "stack up" and not to report uncritically but I can't see any reference to that in the regs

STAR181270's picture

Client Responsibility

STAR181270 | | Permalink

We have to keep in mind that as book-keepers we work for the client. It is they who pays us.

Are we to assume that we are unpaid policemen now? Surely, the government should pay us for all the checks we have to make on the client and their activities? If we have to go so far as checking identities, then we are crossing over into new territory.

Maybe it is different for accountants who bear the ultimate responsibility of signing off after auditing the accounts of a company.  As book-keepers we are paid to record the ins and outs of the client's business.  It should end there in my opinion.

 

 

OFT Blunder!

Anonymous | | Permalink

I have recently registered my company with the OFT, who is the supervisor, in the sector we are involved in and they have recently sent a consultation email to all MLRO officers. The have "inadvertently disclosed" all email addresses of everyone registered with the OFT and I could easily see in the "To" field which companies or individuals that have registered with them!!

Received an email from the Director asking me to delete this particular email - forward it to the papers or delete it??

 

Dangerous utterins

garrycarter | | Permalink

Sorry but cannot agreee.  Just because a client says something is ccorrect you cannot assume it to be so.  As for the Law:  Please see the following extract from the CCAB Guidance -

2.32 It is important that individuals do not turn a blind eye to information, but make
reasonable enquiries such as a professional with their qualifications, experience and
expertise might be expected to make in such a situation within the normal scope of
their assignment or client relationship, and draw a reasonable conclusion such as
may be expected of a person of their standing. Individuals should exercise a healthy
level of professional scepticism, and if unsure of the action that should be taken,
consult with their MLRO or otherwise in accordance with their businesses’
procedures. If in doubt, individuals should err on the side of caution and make a
report to their MLRO.

 

You would be wise to get your facts right in future.

My facts are right!

Anonymous | | Permalink

I asked for a reference to the law and you quote CCAB Guidance but not ML Regs. However, we are agreed that we process data blindly at our peril and I consider the guidance the standard to whic we should all work!

Money Laundering for book Keepers

Carolynne | | Permalink

This getting the client to sign that they have provided the information has certainly caused a stir!  It's hard getting a full picture across in this type of communication, as with a  face to face conversation.  I agree with all that has been said from those who have made a note regarding the responsibilities of the book keeper. 

What I was implying is that, if I do the book keeping for a cash based business, for example, and the client tells me that in the month they have taken £10,000 in cash and have paid this into the bank, and have provided me with a weekly sheet breaking down their daily sales for 'take-away' as an example.  When in fact they have taken £15,000, but have not disclosed this to me, and let's assume here that I have no way of confirming this £10,000 figure because of the processes used at point of sale, apart from the daily hand written sheets supplied.  Because of the written information supplied, as a book keeper entering their 'ins and outs'  Surely I have to accept this as being a true reflection of the clients sales. I am asking the client to confirm that they have been honest and have given me a true reflection of their sales, that is all.  Surely it is not my responsibility to put a secret camera in to count what is actually coming through their till? This is why I get them to confirm the information they have provided me with, in order for me to do their book keeping-- Carolynne.

more at risk

Anonymous | | Permalink

Bookkeepers are more at risk from seeing potential money laundering offences particulary ones that clients will not see as unlawful.

eg Unrecorded cash transactions and cash reconciliation errors/issues, putting the directors expenses (eg home carpets & tv's etc) through the business and claiming the Vat & tax. the deliberate coding of expenses to the wrong category, entertaining described as subsistence, Illegal workers, casual staff  & non compliance with PAYE etc etc etc.

Uncorrected Vat errors, the list goes on and on.

It may not be reasonable for a competent bookkeeper not to have seen these.

Gary I like your approach, stick to your professional standards.

Reasonable reply

garrycarter | | Permalink

Given the greater detail of the actual type of client, I would suggest that you need to use the Treasury's guidance of deciding what is 'reasonable' under the circumstances.  Unfortunately reasonable is not an exact term but, in line with the CCAB guidance quoted earlier, you just need to be sure that the turnover looks reasonable and that anyone else looking at the business would not burst into laughter at your evalation of the information your client is giving you.  We are not Policemen but we are expected to police.  Take this as a compliment - it's only a few years ago that bookkeepers were not thought important enough to be included in the regulations. 

grey areas

Anonymous | | Permalink

I think most of us have clients that we wonder about but there is nothing to put a finger on. I have one particular client who makes me feel very uneasy in my dealings all his records are perfect receipt for everything till rolls the lot but his lifestyle belies his profit. What do I report ? When and how do you get rid of  a client. It is  a lonely life out here.

This is accountancy in 2010 we are always worrying whether we should report . sadly the paying client is just secondary to all this and we are forced into a relationship of taking money off people whilst reporting them to big brother.

The legal and medical profession would not put up with this but our institutes let us carry the burden.

For many book-keepers this regime is the first that they have experienced and I am sure many feel confused particuly

if they are not members of any association. the posting here indicate how valuable this site is.

Given the cash transactions used in the example

Anonymous | | Permalink

I believe the bookkeeper should exercise professional scepticism and look at the surrounding circumstances- why is there no till recording cash sales, gross profit margins, consider the proprietor's lifestyle etc etc, at all times being aware that a cash business increases the risk of a Money Laundering offence.  If suspicious, report.  If you are satisfied all seems reasonable there are no grounds for a report. 

Er

Anonymous | | Permalink

Err on the side of caution and report. CCAB guidance too.

It is most likely that nothing will be done with your report so no need to really worry.

HMRC do not appear to use this information as we are told.

But at least you have covered your Butt.

Big brother is here and has been for some time you just have to accept that.

It is far to late to do anything about it now.

 

STAR181270's picture

Reporting

STAR181270 | | Permalink

 Every answer brings up a new question for me...

If I did report a client, would I have to tell the client I have done so?

If the HMRC do nothing about the reports, then my assumption is that it is a money-making exercise on behalf of the HMRC, which is what I thought in the first place.

 

 

 

TELLING THE CLIENT

Anonymous | | Permalink

You tell nobody, least of all the client!!!!!!!!!!!!!!!!!!!!!!  Tipping off (section 333 MLR) strings to mind here and so does at her majesty's pleasure.....

Say nothing

garrycarter | | Permalink

Whatever you do, never tell a client that you have reported tham.  Firstly it is illegal as, in MLR terms, it is classed as tipping off and that could land you in jail.  Secondly, the client might decide to thump you.

It does sound to me as if you do not really know even the basics.  You need to get this right.  For your own sake join something or at very least scour the HMRC website.  This is something you really can't afford to learn from your mistakes.

My organisation runs MLR seminars up and down the country every year from March to July (other organisations exist, as the BBC would say).  You need to attend something like this to hear what is going on and to meet other bookkeepers who are out there in the real world.

davidwinch's picture

Tipping Off - and Investigations

davidwinch | | Permalink

A couple of points.  I would not advise you to tell a client that you have made a report about him.  Firstly because by doing that you would in most circumstances commit a criminal offence yourself - contrary to section 333A Proceeds of Crime Act 2002 (as amended).  There are some circumstances in which it is legal to tell the client - but these are relatively rare exceptions to the general rule.  (Check with a lawyer or your professional body or an expert in this field BEFORE ever telling a client that you have reported him.)

Secondly the client is unlikely to be chuffed if you tell him you have reported him to the authorities.

On the subject of investigations the Money Laundering Regulations 2007 / PoCA 2002 do not require you to carry out extra investigations beyond that which you would have done anyway in the course of providing a proper professional service.  But in any event you wouldn't deliberately turn a 'blind eye' to something which was unexplained and looked dodgy.  The law talks about reporting suspicions based on information which has come to you in the course of your work (not information you have ferretted out by hiding in the shadows with a tape recorder or video camera!).

Reports go initially to SOCA who then pass on information to (in fact they put the information on a database which is accessed by) the police, HMRC, DWP, SFO etc.

HMRC and DWP are quite keen to follow up information which suggests tax evasion, benefit fraud etc.  But it is by no means the case that every report triggers action by the authorities.

Reports which indicate the more serious crimes, drug trafficking for example, are more likely to be followed up than reports of simple frauds - and where there have been a cluster of reports from different sources about the same person obviously there is greater prospect of the authorities taking a look.

Turning to the example of the client who seems to live beyond his (legitimate) means, this is a judgement call for you.  Are you suspicious that he is engaged in crime which generates 'property' (money or other assets, or the evasion of liabilities)?  Or is the client just an unpleasant character who gives you the creeps?  Only you can decide!

David

The first one is the hardest

Anonymous | | Permalink

Once you have made one report and feel untrustworthy the others will be easy, bit like having your first filling.

It is easier just to comply with state orders, you will find that just about everyone is a criminal anyway, and that includes the authorities. No doubt criminal gangs have informants within HMRC and the police as they have always done, so I would think twice if it really was serious.

If I was a criminal I would keep a close eye on my bookkeeper (it was Al Capones mistaka to maka) possibly even bug their offices etc.

As a bookkeeper you could consider reporting anything as it is quicker to do the report than consider all the issues and at least you do not have to consider professional privelege issues. If they have not done anything wrong they have nothing to fear ... I think is the saying used by law enforcement agencies.

between a rock and a hard place  .... Join the club

Comrade anonymous

To report or not report

Anonymous | | Permalink

From time to time I go through a clients records and they may be more cash expenses than "cash income or cash withdrawn from the bank", or insuffiecent drawings to live on.

I explain it and ask the question - where did the extra cash come from?

So far these are the answers I have received:

1.  Client: I put extra expenses through from receipts others have given me.  Me: What do you want to do about it?  Clients: I will remove all the extra expenses and not do it again.

Result:  Accounts no longer show "cash overdrawn"! - no need to report client for ML.

2.  Client: I did not declare all my cash income. Me: do you know how much you did not declare?  Client: provide an amount in excess of the the amount I think it is.  Me: Are you happy for me to include this amount as part of your income.  Client: Yes

Result: Income is increased accordingly - no need to report client for ML

3. Client: my previous accountant told me to do it.  Me: I'm not your previous accountant, I don't work this way and don't expect my clients to either. Client: Please help me do it correctly.  Me: Of course as long as you tell me everything and do it correctly.

Result: Client is happy not to "fiddle"!  - no need to report client for ML

 

What I am trying to say is that it is important we ask the questions and help our clients not put themselves in the position where we have to report them for ML.  If a client refuses or insists on not making the required corrections then you have no choice - you must report them.

 

By the way Star did the IAB accept you as a member? 

Previous periods

Anonymous | | Permalink

Did you put right previous periods as well, now you have a suspicion that this may have been going on for some time.

Look back 20 years !

STAR181270's picture

Memberships

STAR181270 | | Permalink

 Hello anonymous,

 

I have emailed and requested details of membership but so far no-one has contacted me.

Thanks for asking.

____________________

Above post, yes I agree it is important to talk to the clients, especially where cash is concerned.  Often clients think they can 'shove' some cash into a tin and call it good and help themselves to it everytime they want a hamburger.  When I get to the tin, I find receipts, some going back months, that have just turned up in someone's back pocket. I only record expenditure with a receipt, no receipt - no entry. 

I loved the excuses.

_______________________

I was looking on the HMRC today in the money laundering section and read with interest that there is a hole in their ML accounts to the tune of apx. £1,500,000.  Apparently there is a dispute going on concerning fees.  That's an awful lot of £120's isn't it.

________________________

So, while I was in America, the world flipped over and ML came into being. Now I need to register my office with HMRC or whoever for £120, join a professional body of book-keepers, check my clients' ID's, do a risk assessment on each one, practise due diligence and report anything I think is fraudulent. I also need to go on a course and learn about ML properly. I have looked at David's website and read the case studies; taken heed of the Garry's 

warnings about breaking the law and heard a lot of interesting opinions from all and sundry.

Thank you very much. If anything else comes to mind, please tell me.

Star

YEP

Anonymous | | Permalink

Thats about it ! The oppressed British or are we German now. Still we voted for it so we must enjoy it.

Ring of confidence

garrycarter | | Permalink

Hi Star,

 

Glad to see you've been helped by our disparate bunch of know-it-alls, whoever we are.  You sound a lot more confident now and that is important.  Most clients use bookkeepers because they know little or nothing about accounts.  They often make silly mistakes and can be stunned when they find out that something they have been doing is unlawful or bad practice. In line with a previous comment, it's all about intent.

I hope your applcation for membership with the IAB goes well.  All I would say is; if it takes them a while to respond to your email asking for details of membership, when there is a potential of a fee, will they be any quicker to respond when you have an urgent MLR query.  Whoever you choose, make sure they have good technical and MLR support or life can get pretty lonely out there when you're in a fix!

Best wishes.

Old Greying Accountant's picture

Actually

Old Greying Acc... | | Permalink

Less than 25% of those who bothered to vote voted for it!

Long live democracy!!

protest vote

Anonymous | | Permalink

The greens , Monster raving loony party , and the BNP are high on the list for my protest vote.

We just need to sack each and everyone of the current MP's as they have truly shown themselves to be untrustworthy, convincing people that they need to protest vote may have some interesting results and may be the people would become more important in the considerations of government.

I wonder if the bookkeepers reported those naughty MPs for their money laundering activities, if not may be they should be made an example of first.

Interestingly if the proposed expansion of the term agent includes everyone, will everyone need to register for money laundering and report their neighbours.

I will not be anti pc and mention the regimes that were famous for using such information gathering techniques, there is a version available for every political persuasion, all the same to the man on the street however.

IAB

Anonymous | | Permalink

Hi Star,

I would suggest you ring the IAB and talk to them.  I don't think the e-mail works properly, and as they get so much SPAM, they may not have received your e-mail.  Tell them that you sent an e-mail and did not get a reply, or they will not be aware there is a problem.

Also to the person who asked if I went back to the past - no I did not. Firstly  some where new clients, so there is no past to go back to. I'm  not interested in what a previous accountant did if they had one.  As soon as I have a client that I identify they may not be being honest about their records (I did it before ML so its something I have had in place for over 20 years), I talk to them.  I don't like dishonest clients, never have and will not keep them. I let others have them.  

 

 

 

Cover up

Anonymous | | Permalink

It would seem from your comments that you cover up past crimes, that perhaps should have been reported.

What does an organisation like the IAB say about these sort of matters ?

ICB

Anonymous | | Permalink

Why not just ring the ICB?  The guy from there gave some good advice and they obviously provide a complete instruction manual - I am sure the IAB don't.  He said this also includes all the forms you need to complete.  It sounded as if you needed guidance so this might be your best bet..

Job done.

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Group: Money laundering and crime
A group for discussing issues relating to suspected money laundering and other crime