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Clearance letter requests

Clearance letter requests

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I have had a clearance letter from an accountant with two requests, both unusual to receive. Very unusual is a request as to whether or not I have had any money laundering problems with the client. My immediate reaction to this is that I think that any information supplied by me on this, whether positive or negative, would be impermissible. The second is a request as to whether or not the client had paid me promptly and whether there had been any fee disputes. My take on this is that I would be uninclined to supply any information other than, possibly, to say that my client does not presently owe me any money; alternatively and probably preferably, I might contact the client to ask whether they wish me to supply information and, if so, what information.

Any views, legal or practical, on either of these?

 

Replies (13)

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By Mr_awol
22nd Nov 2021 15:07

To be honest i dont get too many incoming clearance letters (touches wood quickly) but I have had the Money Laundering request before. I just reply that 'it is not the policy of this firm to comment on Money Laundering issues' and that, effectively, it's up to them to satisfy their ML obligations. Nobody has followed up yet.

Similarly I wouldn't comment on fees - I'd just ignore that bit though. Unless they are an excellent client leaving on good terms in which case i might (i had that once and thought it was nice of the previous accountant to do it). The only time I mention fees is if i say i will provide a comprehensive handover pack once outstanding fees have been (billed and) paid. I did once manage to drop it into my holding reply that we were owed £4,350 but normally i am very vague.

Thanks (4)
RLI
By lionofludesch
22nd Nov 2021 15:13

I don't think you should comment on Money Laundering.

As to payment record, I wouldn't tell a stranger but I might tell an accountant I knew. Probably in a phone call, though.

Thanks (2)
paddle steamer
By DJKL
22nd Nov 2021 15:20

Doubt you really can comment re ML, if say you had in the past had issues with the client and say had been required to submit a SAR you could hardly say this was the case to an incoming accountant. (tipping off)

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By K81
22nd Nov 2021 15:42

been asked about fees & prompt payment several times but not money laundering. tend to ignore in my response letter, just send copies of items requested.

Thanks (1)
ALISK
By atleastisoundknowledgable...
22nd Nov 2021 19:01

I’ve been asked once about fee payment - just said that there were no outstanding fees (paid DD). No way I’d comment on ML.

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By Winnie Wiggleroom
23rd Nov 2021 09:27

If you were taking on a new client I am sure you would wish to know whether or not they were a good payer or not, thats just a standard commercial reference request that might influence your offered terms.

ML - no just ignore that

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By SimonStone
23rd Nov 2021 09:28

In line with others, I 'might' tackle the payment of fees over a phone call, but not the AML info.

At best, something like 'we would confirm that we have met all AML requirements in respect this client' , or something equally non-committal if you felt you had to respond at all. I'd probably just ignore and they'll probably not contact you again!

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By The Innkeeper
23rd Nov 2021 09:38

I once asked the technical bods at ICAEW and was told that I must not answer the AML question

Thanks (2)
Replying to The Innkeeper:
RLI
By lionofludesch
23rd Nov 2021 10:15

The Innkeeper wrote:

I once asked the technical bods at ICAEW and was told that I must not answer the AML question

Yeah, I think I've read that advice too.

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Replying to The Innkeeper:
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By Ben Alligin
23rd Nov 2021 10:16

That is very unusual to be given such a definitive answer by ICAEW. What happened to the 'You can't rely on any advice that we may provide', or worse still 'we cannot advise you on that matter' which is what I always get.

Who did you speak to? I'll ask for them in future!!

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Replying to Ben Alligin:
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By The Innkeeper
23rd Nov 2021 10:20

I actually asked the question before the ridiculous disclaimer started. That is the reason I rarely bother with them these days. I believe it is a PI issue.

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By brumsub
23rd Nov 2021 11:35

Although dated, this question was asked in 2009 when it was in vogue. Link here:
https://www.accountingweb.co.uk/any-answers/money-laundering-issues

Thanks (1)
@enanen
By enanen
26th Nov 2021 11:21

'We do not provide any information outwith the accounts data requested. You need to carry out your own due diligence.'

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