Confused....
So if my turnover is below £64,000 I do not need to register?
Response to Gerard
Gerard
If you supply accountancy services (such as accounts preparation, book-keeping or 'internal' audit services) in the UK for clients who pay you then you are an "accountancy service provider" and the MLR apply to you and you must be supervised (either by HMR&C or by a professional body). The £64,000 turnover limit does not apply to a person whose main activity is as an "accountancy service provider" (or indeed any other activity which falls in the 'regulated sector - except 'high value dealer') as you do not meet ALL the required conditions for exemption.
For anyone wondering what Gerard is referring to you can check it out in paragraph 1 of Schedule 2 to the MLR 2007 ("Financial activity on an occasional or very limited basis") or in HMR&C booklet MLR9.
To see how this might work in practice, imagine someone in business which is not in the 'regulated sector' (say a hotel) with an annual turnover of, say, £1 million. The hotel also gives advice to foreign visitors staying in their hotel on how they can purchase goods in the UK without VAT to take back to their home country, and makes a small charge for that advice. The annual income from that charge is, say, £30,000. That is "tax advice" and falls within the regulated sector. So one would think that the hotel needs to appoint an MLRO, issue anti-money laundering policies and procedures, train relevant staff, etc., etc.
However because their activity in the 'regulated sector' is ancilliary to their main (hotel) business which is not in the 'regulated sector', offered only to customers of their main business (and not generally to the public), comprises less than 5% of their total turnover, is less in total than £64,000 per annum, and is not a money transmission service, and the charges are less than 1,000 euro per customer for that advice, then the hotel is exempt from registration and compliance with MLR 2007.
(Of course the hotel, like everyone else, is still subject to sections 327 to 329 Proceeds of Crime Act 2002 which deal with money laundering by the hotel itself and reporting its own money laundering activities, if any, to SOCA to obtain consent.)
Fees will increase...
Thanks David, I thought the £64k 'threshold' was too good to be true.
I wonder how many people providing only 'bookkeeping' services and probably not registered with an accounting body will be ignorant of this wonderful new wheeze....
Where to start . . .
If you are the MLRO of a practice which consists of more than,say, four fee earners (in other words not a very small practice) where should you start in dealing with the new MLR 2007?
I would recommend reading (and re-reading) the new CCAB guidance (there is a link to it in the article above). This is very valuable - but it does run to 80 odd pages.
You might also wish to read HMR&C booklet MLR9 (not as good but shorter!). This booklet will be of more use to very small firms.
If you try reading the regulations themselves from the beginning you may not get far! They are not an easy read. If you feel you do want to read them (because you know that accountancy services and tax advice fall within the 'regulated sector') then start by reading regulation 20 (very carefully! - ask yourself if your firm has established the risk-sensitive policies and procedures required in each of the six areas (a) to (f) listed and is properly applying those policies and procedures, there is a lot of ground to be covered there), then 21, then 19, then 5, 7, 8 and 9, then 11, 13, 14 and 17. Finally you need to be aware of the requirement to register with HMR&C (regulations 32 and 33) or with a professional body. An accountant who has read these thirteen regulations (out of a total of 51 regulations in the MLR 2007) has got the 'guts' of what the MLR 2007 mean for him!
I do not think there will be a single accountancy firm in the country which will not need to take some action to re-vamp its anti-money laundering procedures as a result of MLR 2007.
and.....
will the new regs achieve anything? doubt it
given that our banking system works pretty well e.g. HSBC.......
it's easy, just make it ILLEGAL for businesses to make cash transactions above £1,000 without specific prior authorization from some slimy jobsworth.
In tandem negotiate with the banks to slash their penal charges on businesses that bank large amounts of cash e.g. wholesalers.