Do I need to be AML when acting when referring

Am i required to be aml registered when referring clients to an accountancy firm.

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Hi,

I am currently in tax marketing, and have been approached by an accountancy firm who have offered a small fee per every self assessment I source for them.

My main question here is, as I will be onboarding the clients and providing information on what they need for a self assessment. Do I need to register for AML and as an "agent"?

Or am I ok not to register as I will basically be informing the leads of what they are required to add to their self assessment such as income, expenses etc and then passing on the information to the accountancy firm once the client approves. (I my self will have no contract with the client).

 

thank you in advance. 

Replies (16)

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Stepurhan
By stepurhan
04th Jan 2024 08:55

You say you will be onboarding the clients in one sentence, then say you will have no contact with the client in another. I assume by the latter you mean that you will not be involved with the actual work, but it would be helpful to clarify.

What contact with the client will you be having and how much involvement will you have before passing them on to an accountancy firm? It sounds a lot like you might be giving some initial advice, which may well require AML depending on what you are saying.

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Replying to stepurhan:
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By Mp111
04th Jan 2024 09:34

Hi, thank you for the information.

Yes, there would be initial information such as informing what a self assessment is, how it works if they don’t understand and informing they can offset running costs against their tax as expenses if eligible.

After a few replied I feel I may require AML, however I am not sure if I will need to do KYC checks.

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Replying to stepurhan:
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By Tax Dragon
04th Jan 2024 17:53

stepurhan wrote:

You say you will be onboarding the clients in one sentence, then say you will have no contact with the client in another.

Contract, not contact.

Seems like January is starting to do to you what it did to me 56 hours ago.

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By Roland195
04th Jan 2024 09:07

From the limited explanation, I would proceed on the basis that you will require to register for AML until you can get explicit confirmation otherwise.

It seems to me it will depend on exactly what "informing leads of what they are required to include" amounts to - The fact you can make a business out of this suggests this must be more than what a client can read for themselves so potentially advice?

David Winch will likely be able to provide a much better answer - tag your post as AML so you shine the the AML signal for him & he'll appear.

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Replying to Roland195:
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By Mp111
04th Jan 2024 09:32

Thank you for this. I think I may be best doing it to make sure I’m covered.

However, I do not think I will need a KYC check per client as I will not be dealing with them as far as offering a service is concerned. Would you agree?

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David Winch
By David Winch
04th Jan 2024 09:16

Hi, you say that you will be "providing information on what they need for a self assessment". That sounds close to providing (some very basic) tax advice. Have a look at Reg 11(d) MLR 2017 and decide if what you will be doing makes you a "tax adviser".
https://www.legislation.gov.uk/uksi/2017/692/regulation/11
David

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Replying to davidwinch:
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By Mp111
04th Jan 2024 09:30

Hi David,

Thank you for the information.

Excellent, I feel I would potentially fall under

(d)“tax adviser” means a firm or sole practitioner who by way of business provides [F1material aid, or assistance or advice, in connection with the tax affairs of other persons, whether provided directly or through a third party], when providing such services.

Even though I would not be carrying out any work. Initially I would be informing them of what is required and even basic information of how a self assessment works.

As far as “advice” is concerned, the most amount of information I would provide is telling the client what they are able to offset against their income such as expenses like mileage and material costs - would you deem this as advice even though it can be located by any member of the general public via the gov website?

And to this extent, would I require a KYC check? As I would not be charging the client directly a fee nor contracting them to my services.

I think I may register for AML to be on the safe side.

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Replying to Mp111:
David Winch
By David Winch
04th Jan 2024 10:18

Hi, You say you could be "telling the client what they are able to offset against their income such as expenses like mileage and material costs - would you deem this as advice". Absolutely, yes I would describe this as tax advice.
However it may be that you are not required to register yourself for AML purposes if all of your clients are themselves registered for AML as accountants (either with HMRC or one of the professional bodies) and for AML purposes they effectively treat you in the same way as one of their own employees. That would mean that you would report any suspicions to them (effectively as your MLRO) and they conduct CDD on the clients and organise AML training for you.
David

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Replying to davidwinch:
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By Mp111
04th Jan 2024 10:25

Hi David,

Thank you.

Yes the company I am providing leads to are fully AML compliant, they carry out all the AML checks on the client and engage contract with the client.

The accountancy company its self is my client, I will be invoicing them for the sourcing of leads.

That being said, would I not be required to register for AML as they will be doing all of the AML checks and are fully AML compliant.

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Replying to Mp111:
David Winch
By David Winch
04th Jan 2024 11:28

Because your client is the accountancy firm and they are AML compliant then if your contract with them sets out that they will, for AML compliance purposes only, treat you as if you were an employee of theirs (so that you get your AML training through them and if you have a suspicion you report it to them) then you do not yourself have to register for AML supervision with HMRC.
David

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Replying to Mp111:
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By FactChecker
04th Jan 2024 13:02

PLEASE take careful note of what David says after "if your contract with them .."

That is not a 'nice to have', it is a formal written contractual set of terms with which they may or may not be comfortable if they see you simply as a free lead generator.

I have to say that I'd be wary in your shoes.
It sounds like you are taking all the risks and costs on yourself in the hope of creating a 'qualified' lead for a 3rd party who only pays out if they get a new client out of your work?
And you may find yourself being drawn further than intended into the 'advice' arena if they start to demand tighter qualification of the leads with a host of potential issues following.
Do you explain the circumstances where "mileage can be claimed" and how that relates to a specific person - or do you just raise their hopes and leave it to your client to do all the hard work of disabusing them?

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Replying to FactChecker:
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By Mp111
04th Jan 2024 22:09

Thank you for the reply.

Regarding the self assessment, I will asking questions to see what their annual income is and finding out what expenses they have that can be offset. (typically landlords).

I will them ask them to fill in a form to confirm the information and pass this onto the accountancy practice.

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Replying to Mp111:
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By Tax Dragon
04th Jan 2024 23:04

We wouldn't work with you on that basis. We might pay you for an introduction, but we'd want to collect the information we thought relevant direct from our new client.

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David Winch
By David Winch
04th Jan 2024 17:38

To make life easier I have put a short article on the MLRO Support Ltd blog dealing with AML Compliance for accountants acting solely as sub-contractors for other accountants.
https://mlrosupport.co.uk/aml-compliance-and-accountancy-sub-contractors/

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Replying to davidwinch:
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By Mp111
04th Jan 2024 22:07

Great information David.

I will ensure to check it will be in the contract set between my self and the accountancy firm regarding the AML supervision. (Ensuring I am part of the company's AML training and procedures).

From the information provided, I am most definitely now certain I am advising the companies clients, as I will be letting them know what they are entitled to self assess and what they can offset against their annual tax bill via self assessment.

Thank you again for your in depth knowledge.

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Replying to davidwinch:
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By FactChecker
04th Jan 2024 22:50

Now that's what I call service, David.

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