I have a client who exports high value goods overseas - non EU. Client is as honest as the day and I have met the agent in question. Gut feeling tells me he is honest but likes to push the margins as far as he reasonably can in the context of expanding his rather vast empire. I would personally trust the guy without question and believe he would not do anything blatently dishonest. He is a long term friend of my pretty astute client.
My client basically locates product, purchases them on behalf of his customers, invoices his customers in advance of delivery, reclaims VAT if appropriate and handles shipping/admin etc for a variable fee based on time taken/expenses etc. All fine until he came across a stumbling block. One manufacturer cottoned on to the fact client was exporting to a country where they have an agency and does not like it so are now refusing to sell that product to my client as he is being honest about the export status when trying to purchase.
One overseas agent has found other contacts in the UK that are prepared to get the product in question from the manufacturer and export it but both the agent and the vendors want the security of my client handling funds. He would supervises the export of the goods/handle admin transactions (except VAT claim which would obviously be done by original trader) and would be paid a fairly moderate fee for his share of the work. He is comfortable with this and is anxious to keep the lines of trade open.
There are significant amounts of money involved and both the overseas agent and the UK traders are a bit wary of each other at the moment. They are wanting my client to act as a middle man for transfer of funds because the overseas agent knows he can trust my client with his money. UK dealers know they can trust my client for payment. For this reason funds would go in and out of my client's Ltd Co as a straight contra - fee invoiced and paid separately - with no invoice to back up the transactions which is where I start to worry. I am 100% certain that the payment is in respect of goods that are shipped to this agent but am concerned that HMRC would percieve this as money-laundering. I know zilch about that subject really and I could do with some other opinions.
Again I am 100% certain everything is legitimate with client and as certain as I can be that they are with the overseas agent - a wealthy man. I really do believe this is being done as a means to an end but not sure how it will be perceived by others or whether it is OK to use the Ltd Co as a vehicle to do this without my client being put in an awkward situtaion. Client will not participate in anything that is not legit and has agreed to this post as I was not confident in my own opinion. He cannot see a problem but.......... I would really value your input.