AML after reading Sardun's post

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 I read Sardun's posting about coming clean. I have been part-time since 1984 and went full time in 2004. The 2004 business went sour in 2008 when my business partner fiddled me out of £55,000. In 2008 I became freelance working for three separate accountancy practises, at different times, and had about 4 clients of my own. I was freelance in 2017 when AML came in and my 4 clients got handed over to the accountancy practise I was working for. The guy I was working for told me I didn't need a AML, me being freelance, and I took his word for it. In August 2023 we had an argument, so he said you are now on your own and you can take the 24 clients, you've been dealing with. He told me he had no ID, for these clients, and you will need your own ASA. He then told me that I should have had my own AML from 2017 and will need to get all the clients' IDs and send me copies for my files. It took me 4 months to get everything I needed to be AML compliant. He still has freelances working for him and not one of them have an AML licence. I, after all my expenses since September 2023, will have made a loss(because most of the work had already been done) and this has been financed by my state pension. My wife is disabled and takes a lot of looking after, as pensioners we don't get benefits, so money is very tight. I am now completely legit albeit that my files and record keeping may not be up to scratch. Once me and my wife get this legal claim sorted, it might take two years, my intention is to retire.What is your advice on my situation? Should freelances have AML licences if it is only one practise, where that practise has their own AML licence, that the freelance is working for?

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By Kosher
08th Apr 2024 12:27

I think this one is for David Winch's expertise

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Replying to Kosher:
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By FactChecker
08th Apr 2024 14:13

I would certainly rely more on David's thoughts than anything I say on this topic ... but the key bit that jumped out at me in your sorry saga above was that you were working freelance for your previous 'employer'.

Obviously I have no idea as to the exact arrangements (or whether that was in fact the correct status), but AFAIK the lack of need for individual AML registration only applies to *employees* within an organisation that itself has the requisite licence (and practices) in place.
Cover does not transfer to anyone else doing work for them as a non-employee.

So .. "What is your advice on my situation? Should freelances have AML licences if it is only one practise, where that practise has their own AML licence, that the freelance is working for?"
* I can't possibly provide advice on your specific & complex situation.
* I will bow to David on your 2nd question - but I believe the answer is Yes.

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Replying to FactChecker:
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By Tables Force
08th Apr 2024 16:25

FactChecker wrote:

Obviously I have no idea as to the exact arrangements (or whether that was in fact the correct status), but AFAIK the lack of need for individual AML registration only applies to *employees* within an organisation that itself has the requisite licence (and practices) in place.
Cover does not transfer to anyone else doing work for them as a non-employee.

If all your customers are accountancy service providers supervised by HMRC or a professional body, or banks supervised by the Financial Conduct Authority you do not need to register so long as:

- you do not do business directly with the supervised accountancy service providers’ or the banks own customers
- you’re included in the supervised accountancy service providers’ or banks anti-money laundering controls and procedures, suspicious activity reporting, and training programmes
- you have a written contract with each of your customers confirming that every aspect of the relationship between you meets all anti-money laundering requirements

You need to meet all these conditions, otherwise you’ll need to register.

(https://www.gov.uk/guidance/money-laundering-regulations-accountancy-ser...)

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Replying to Tables Force:
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By FactChecker
08th Apr 2024 19:40

That's a better summary than my previous 'from memory' one ... but then again it's only GOV.UK which has, as always, slightly oversimplified some elements.

In the context of OP's situation (both as set out above and to some extent as further expanded upon in other recent threads), my default position would remain that he needed to be AML registered for the work he was doing as a freelance for his previous 'employer' ... UNLESS he could satisfy himself (and if necessary HMRC) that *all* the exemption criteria had been met AND could be evidenced.

Which, although I am merely guessing here based on what we've been told, is why it sounds to me like individual registration should have been in place.

As we all keep saying though, David or any other expert in this area could provide specific paid for advice that is worth more than my mere thoughts.

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DougScott
By Dougscott
08th Apr 2024 13:01

Google CCAB AML Guidance.

Not sure where you've been Kosher but MLR Registration requirements have been around since at least 2009.

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Replying to Dougscott:
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By Kosher
09th Apr 2024 09:35

Dougscott wrote:

Google CCAB AML Guidance.

Not sure where you've been Kosher but MLR Registration requirements have been around since at least 2009.


I will google CCAB AML Guidance thank you.

Prior to 2009 I was operating as a co director of an Accountancy Practice. From October 2008 to June 2009 I was freelance to a practice and had a contract in place to cover me, not sure if the practice was covered by AML. I then took a part time job, in October 2009, doing book-keeping work for a guy who ran a Public House and a Property Development company and also worked for another Practice freelance and covered by a contract, both of these ended in 2011. I than worked as a freelance with a contract with another Practice from August 2011 right through to August 2023. I have no idea whether he was registered for AML until the act came in in 2017. I was definitely covered under his AML and was required to undergo training every year so his Practice was fully covered under AML. I then took over these 24 clients in August 2023, when me and my 'boss' had a fall out, and I registered for AML which I need before I got my ASA. It has been a hard learning curve and I've now registered for the 3 HMRC webinars this week. The only thing untoward was I had about 6 private clients, which I've had since 2001, these were put into my 'boss's' ASA in 2013 and were covered under his AML from 2017.

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By I'msorryIhaven'taclue
08th Apr 2024 20:48

Did you have a leakproof contract for services with your former contratctor (ie the practice you sub-contracted to)?

If not, have you considered reporting yourself and the contractor practice for treating you as a freelance subcontractor when, evidentially, you were an employee. If HMRC agree with you then it might help your legal claim and your freelancer earnings may well be treated as net pay.

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Replying to I'msorryIhaven'taclue:
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By Kosher
09th Apr 2024 09:48

I'msorryIhaven'taclue wrote:

Did you have a leakproof contract for services with your former contratctor (ie the practice you sub-contracted to)?

If not, have you considered reporting yourself and the contractor practice for treating you as a freelance subcontractor when, evidentially, you were an employee. If HMRC agree with you then it might help your legal claim and your freelancer earnings may well be treated as net pay.


I was freelance and not employee. I've done my own accounts and tax return each year. I know for certain that I was covered under his AML and had to undergo training each year, to keep me up to date. My 'boss' could not put accounts together or do VAT returns, he could not file accounts and Corporation tax returns on IRIS and so it was all left to me and other freelances to keep his Practice going. My freelance 'wages' were £12 a hour, so my annual earnings were very small. Needless to say, me and my co-freelancers were on low 'pay' while he was making £50,000 a year for just filing about 80 Income tax returns a year, mostly done in January, on HMRC software. Out of that £12 I had expenses to pay out, travelling to his clients' premises, stationery, phone, IRIS and payroll software. If I'd been an employee my pay would have broken the rules on NMA and NLW.
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Replying to I'msorryIhaven'taclue:
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By Kosher
09th Apr 2024 09:53

The legal claim is nothing to do with my business. My wife has been defrauded, by a foreign company, out of £80,000 of her savings leaving us both with state pensions only to live on, this is why I can't retire. We are trying to sell our house, to downsize, to replace some of our savings.

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