I am disposing of my practice but expect that it will take a few months before all sorted. I have received notice of Practice Assurance Visit from AAT. Rather than remaining a member of AAT I am considering registering with HMRC for money laundering supervision. Any advice re wisdom of this move much appreciated .I have notified AAT of my intended retirement but they say the visit must go ahead. There are no issues with my practice which is fully computerised and clients have all been with me well before 2007 but I cannot be bothered with hassle.
Thanks for responses and advice.
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If you are retiring from practice why not remain supervised by AAT until then? I do not know why you have referred to 2007. Even if your existing clients are all pre-2007 clients, you still need to be supervised for money laundering and you should have evidence that you have carried out all the necessary identification, record-keeping and due diligence checks etc.
The 2007 ML Regs required "a relevant person must also apply customer due diligence measures at other appropriate times to existing customers on a risk-sensitive basis", Reg 7(2) and "A relevant person must conduct ongoing monitoring of a business relationship" which includes "keeping the documents, data or information obtained for the purpose of applying customer due diligence measures up-to-date", Reg 8.
In order to do anything on a "risk-sensitive basis" you need to assess the risk - which requires CDD on existing clients.
So while the 2007 Regs didn't spell out that you had to do CDD on existing customers, you couldn't comply with them if you didn't.
'Any advice re wisdom of this move much appreciated'.....This move is in my opinion showing a lack of wisdom. Just comply with the visit. That's much easier than any alternative course of action, unless you actually have something to hide.
My ICAEW QAD was maybe 4 hours of my time. I'm sure it will be OK and not that much faff.
How hard would it be to carry out checks on your current client bank? Surely that's your best option.
Maybe it's time for you to read the AAT's rulebook regarding such inspections. If they're not giving you the correct notice or have made any procedural error such as the form of notice then you might be able to stall them off. Are they within government guidelines by visiting you in person? Ought the "visit" be carried out remotely because of your age and/or vulnerability to covid?
Good luck! I too have clients of 15+ years vintage who were known to me (fellow mums and dads from the touchline at school matches, fellow golf club members, neighbours for whom I'd already carried out home visits by attending their World Cup BBQ... that sort of thing) and, like you, I was able to safely assess these pillars of the community as the lightest possible risk at that time.
Just carry out a full check on each now, using the present criteria, to mitigate your position. But do look to see just what the penalties might be for your failure to do the fandango this past decade and a half. Might be safer / cheaper to just shut shop for your remaining handful of clients and resign your membership this week. Are you permitted to continue to correspond with the new accountant(s) after such a resignation ie after your practising certificate has expired? Does anyone here know?
I suspect the inspectors would regard that as the 'Nelson technique' and so not be satisfied.
If you consider you are doing everything correctly what is it that so concerns you about the visit?
I did a bit og googling. https://www.aatcomment.org.uk/trends/coronavirus/aats-practice-assurance...
AAT did not do visits during covid main lockdown/aftermath, instead doing remote reviews, no idea what their stance is now, but given your movements around the country etc suggest they do a remote review with you. After all, if it worked for them during that 2 year period then it will work for them now. I wouldnt allow them in my office - its my house and I am high risk. Sure you can swing that.
Also, I found this. http://www.aat-interactive.org.uk/cpdmp3/2014/Event%20slides/Practice%20...
It might help focus your mind on what is needed. As a one man band you can lose a few bits about staff/probabs client money, so focus on the main parts. If you have no cpd spreadsheet for the year/last year you could easily knock one up in 30 minutes, you dont need to use their systems, just use your own!
Dont get stressed, it isnt worth it!
Certainly not worth jumping ship to move to HMRC neither.
Apologies if my comment was a tad oblique.
It's not my area of expertise, but the point I was trying to make is that most of these compliance standards & audits are similar, in one key way, to the Maths O levels of my youth ... where they stressed "Show workings".
So, at the risk of being pedantic (as I'm sure the inspector will be), when you say you "review" the files every 2 years and "tick box saying no concerns" ... that is unlikely to be sufficient on its own.
1. Do you have a documented procedure (a list of actions/steps) that you perform when carrying out a 'review' of a file?
2. Does this include, if you encounter anything whilst following those procedures that is less than 100% OK, what you need to do in addition?
3. Are there contemporaneous notes of any of those additional actions that you had to take (and the results)?
4. When you tick the 'no concerns' box on the file, do you also at least date that action?
I'm sure that there is a lot of detail that I've omitted, but that (fairly simple) list would at least show evidence that you've understood your responsibilities and done your best to comply ... which is a large step in the right direction.
If you feel that you can show something along those lines at an inspection (real or virtual) then I can see no reason to worry ... annoyed though you may well feel at the call upon your time.
Otherwise shutting up shop in advance might work - although I'm not sure that the PB's potential penalties cannot be applied retrospectively?
On what basis can AAT still carry out the visit if you have resigned?
My understanding is a full practice assurance visit covers much more than ‘just’ AML.
Search for a recent TaxCalc webinar regarding this topic.
They will want to see signed engagement letters for every client, disengagement letters, signed accounts, signed tax returns, AML training records, CPD record etc etc
Not saying you haven’t got this but if you want to avoid the hassles then it’s more than just AML.
On what legal basis can they still insist on a visit post resignation?
Was in a comparably similar boat (except with ICAEW) and couldn't face the prospect/stress even if I realistically felt that I would not have any issues arising, having endured 2 previous QADs over the (too many!) years but with no problems. I resigned from ICAEW in early Feb. and although imminently expect to fully retire, applied to register with HMRC just to "see my remaining work time out". However, despite absolutely no reaction, as yet, from HMRC I'm still entitled to practice pro-term despite that lack of ICAEW supervision. If they don't register me very soon I shall simply cancel my application and get a refund! In any event, if the income is less than £5K you can theoretically get a reduction anyway in due course. It's quite a relief to not have that supervisory sword of Damocles (ICAEW) over your head any longer!