Is an anti money laundering report required?

Is an anti money laundering report required?

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I have a client (sole director and shareholder of a limited company) who has been uncontactable for several months. He has just emailed me to tell me that his only contract (he is IR35) finished some time ago and that he hasn't been able to obtain any more work. As such he has spent all the ltd co cash and is having to consider bankruptcy/liquidation of the business.

Is this classed as misappropriation of funds and therefore a money laundering offence?

Can anyone advise me as to the steps I need to take if the company does indeed go into liquidation?

Many thanks

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David Winch
By David Winch
17th Jun 2014 15:11

Two points

If the company is insolvent then I suggest you advise him to contact an Insolvency Practitioner.

The danger is that he will have an overdrawn director's current account with the company.  You could discuss fixing that by way of dividends (if there are distributable profits available) or salary (if there are not).  Of course either may create liabilities to HMRC (and indeed there may already be liabilities re any overdrawn DLA).

Of course you need to be sure that you will be paid for any further work you do!

Money laundering issues come into play if he has been dishonest - for example if he has drawn monies out of the company knowing that as a result creditors (such as HMRC) will not be paid & the company will cease to trade (or has already ceased to trade).

David

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