Late Registration for AML Supervision

What are the implications of late registration for AML?

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I have been in practice on a part-time basis for several years, and am registered with HMRC as an agent.  I was completely unaware that I had to register with HMRC (I am not a member of a professional body) for MLR, only registering when I discovered the breach of regulations in March 2024, to which I immediately took steps to rectify the situation.  HMRC have never contacted me in this regard, although I have had correspondence from them about clients over the years.  I have always conducted the relevant checks and have always asked clients questions about their finances if I was unsure as to the source of any transactions.  I now have all the relevant documentation in place.

My application has recently been accepted, but now they have sent me an email stating that they wish to contact me about my registration.  I, perhaps foolishly, looked at the possible financial implications of this breach of the regulations and must confess to having sleepless nights with the worry of it all.

I hope someone could help me please.  Some of the figures I have consulted are eye-watering, and I certainly cannot afford to pay fines of nearly £12000 when my turnover is approx. £3000 per year with about 10 clients in total.

Thank you

Replies (20)

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stonks
By WinterDragon
04th Apr 2024 17:28

Hopefully David Winch pops up here as he tends to be a walking textbook on AML matters but I have spotted a guidance page from HMRC that might be useful for you.

HMRC wrote:

When we will not issue penalties or other sanctions

Reasonable steps

HMRC will not normally impose a penalty or other sanction where we are satisfied you took all reasonable steps to ensure a requirement would be complied with.

We will also consider whether you have followed any relevant guidance that was issued at the time the breach occurred and was issued by HMRC or another appropriate body and approved by HM Treasury.

https://www.gov.uk/government/publications/money-laundering-supervision-...

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Replying to WinterDragon:
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By sardun
04th Apr 2024 17:36

Thank you for your comment - I have always been compliant with regulations in the past and have always responded to HMRC in a timely manner so hope that counts for something. I really appreciate you taking the time to comment

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Replying to sardun:
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By Paul Crowley
04th Apr 2024 18:18

I think that how you dealt with HMRC on other matters has no bearing.
They will be looking solely at the AML stuff.
The penalty will probably take into account the fees that you would have paid had you registered on time.

It may be worth joining one of the PBs that will accept experience over exams, but only after this has settled.

Agree Winter, David is the one who has dealt with this stuff.
You would be better off represented.

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Replying to Paul Crowley:
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By sardun
04th Apr 2024 18:25

Thank you for your reply

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David Winch
By David Winch
04th Apr 2024 19:51

You might find the information on this page useful
https://www.gov.uk/guidance/money-laundering-regulations-appeals-and-pen...
There are various guidelines for penalties (with fixed elements and elements based on your gross annual profit) and the amounts can move up for serious breaches and down for unprompted disclosure and prompt payment.
David

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Replying to davidwinch:
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By sardun
04th Apr 2024 20:11

Thank you for the very helpful information, David.

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By FactChecker
04th Apr 2024 20:33

I will add what David cannot say quite so bluntly ... you will NOT be better off in the long run if you fail to tell HMRC now (whilst you still have 'unprompted' on your side).
So read the link he's provided and make sure you tell HMRC *before* they ask you!

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By sardun
04th Apr 2024 20:45

Thank you. I already have told them and am now approved, but they sent me an email stating that they needed more information about my registration. That’s as far as I’ve got so far because they wish to ensure I am happy to correspond by email. I said that was fine and am waiting for the next email from them detailing the additional information they require

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By Matrix
05th Apr 2024 08:13

It sounds as if there were insufficient checks regarding AML when agent codes were historically issued, so a weakness in HMRC’s onboarding.

However I would certainly check your original application to ensure you answered truthfully if there was a question about AML supervision.

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Replying to Matrix:
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By sardun
05th Apr 2024 19:50

Thank you for your reply. I shall certainly do that.

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By I'msorryIhaven'taclue
06th Apr 2024 09:45

Why not go register with the Institute of Certified Bookkeepers?

Fast-track AML: "If you are not yet a member, we can offer you temporary MLR supervision whilst you apply for membership." You could be up and running by lunchtime!

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Replying to I'msorryIhaven'taclue:
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By FactChecker
06th Apr 2024 16:28

All part of Raising Standards through professional membership then?

Wholly unrelated ...
... mention of ICB made me wonder who was actually the main mover (even owner of) the FAB! 'event' so heavily promoted on this site - but I can't find anything where any body admits to this.
Organiser apparently is NEC (which I'd have thought of more as the venue), and there are plenty of Sponsors plus of course the Exhibitors ... but nothing that I can find where anyone proudly states we are the founders/owners/driving force or whatever.

Why are they so shy? Or have I simply scored gamma- on the Search test?

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Replying to FactChecker:
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By Paul Crowley
06th Apr 2024 19:19

I thought the same, but then let the thought go.
The question on beneficial interest did remind me though.

The AccountingWEB conferences of the past were clearly branded.

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Replying to FactChecker:
stonks
By WinterDragon
07th Apr 2024 19:03

FAB was organised by Sift - unless there is a shadowy organisation pulling the strings behind the scenes.

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Replying to WinterDragon:
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By FactChecker
07th Apr 2024 20:59

I sort of guessed that ... but can't find any place on a wide variety of sites/web-pages which explicitly states that.

So my question was an honest one of:
Am I just looking in the wrong places (or being dense if you prefer)?
Or is there an obvious reason (that I've not thought of) for them not to shout it from the rooftops?

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Replying to FactChecker:
stonks
By WinterDragon
08th Apr 2024 11:22

Mike Goldsmith of Sift is listed on the FAB website* as the Event director as well as popping up in a thread** about FAB talking about announcing more speakers for the event. Mike also takes credit on his profile bio***

If that isn't concrete enough then if you look at the privacy policy**** on the FAB website, Sift Ltd is the data controller. And lastly, if you run a WHOIS***** search on the domain fab.uk then it's registered to Sift Ltd.

*https://www.fab.uk/contact/our-team
**https://www.accountingweb.co.uk/any-answers/festival-of-accounting-and-b...
***https://www.accountingweb.co.uk/profile/mike-goldsmith
****https://www.fab.uk/privacy-policy
*****https://who.is/whois/fab.uk

Hopefully, this is beyond any reasonable doubt. As for shouting from the rooftops - that seems like an odd thing to do. I couldn't honestly tell you who organises Accountex but I still attend every year. The proof is in the pudding and not who made it!

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Replying to WinterDragon:
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By FactChecker
08th Apr 2024 13:45

Thanks ... very thorough (far more than I was 'calling for' but conclusive).

FWIW I wasn't that exercised by it (or suggesting anything nefarious), merely musing in a puzzled tone ... brought on by my recollection (from days well gone by in my then Marketing capacity) of all the major Events being heavily 'branded' by their owner/chief promoter - whether an Institute or commercial operator.
So I expected to see Sift proudly promoting FAB! as the latest addition to their stable of 'leading', 'independent', 'accounting', 'learning', 'advisory' (whatever words make up their mission statement/by-line nowadays) family of professional services - or some such.
Maybe fashions have evolved (unnoticed by me - which would be no surprise) and it is now considered de trop to 'brag' like that?

Anyway, as I said I was just curious ... but thanks (award for above and beyond)!

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Replying to FactChecker:
stonks
By WinterDragon
08th Apr 2024 15:24

Don't worry, I went on my own quest because although I met several people from Sift that talked about the hard work that went into preparing for FAB, nobody was as explicit as saying "This is a Sift event that we have organised all by ourselves." I had to find the conclusive evidence to satisfy myself in case I was having severe hallucinations and my memory was playing up again.

I suppose times have changed in terms of who gets the spotlight. Maybe Sift aren't bothered about the punters knowing this was a Sift Event and were instead promoting their launch partners that paid the most for the biggest stands and to get their logos on everything.

AWeb did get a stand at FAB and I am now the proud owner of AccountingWeb socks. I really must insist all the other Aweb readers make the trip next year as it was a lively event and the content sessions were better than some of the snooze fests I've sat through before.

@Sift if you want to use my comments for testimonials again (without credit), please reach out to me as my rates are quite reasonable

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Replying to WinterDragon:
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By DJKL
10th Apr 2024 12:43

I thought it was Lady Penelope and I must point out that Parker always looked a bit shifty.

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By buttercup books
10th Apr 2024 12:25

Now this AML registration raises an interesting question.

I am ancient, I had intended to retire at the end of this year, and just keep on 3 clients that I do book-keeping for - straight forward, bag of invoices -easy to do book-keeping. Turnover around £7000

I had thought, AAT - let it lapse £500 a year fee for nothing, - just keep a bit of PII

but - this question made me look at the HMRC site - HMRC starting fee for registration is £300 - and it looks like a fee for this and a fee for that, it could very easily add up to the AAT annual fee

Any suggestions

BB

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