HMRC warns accountants face fines for AML failings

15th Jan 2020
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By Steve Murray, IRIS’ AML specialist

Accountants have been warned by HMRC they face penalties or other sanctions if they fail to comply with its recent requests for Anti-Money Laundering documents.

Penalised firms face a double whammy of punishment too, with inevitable damage to their reputation. Company names and fines are published on the HMRC website, with likely media coverage amplifying the harm.

HMRC has been sending letters to practices asking for evidence of compliance with AML legislation. It has also published a basic outline of guidance regarding the new AML rules, called 5MLD, which took effect on Friday (10 January).

Further reading:

Accountants started to receive letters from HMRC before Christmas. These reference the previous EU directives on money laundering and terrorist financing, covering 2007 to 2017.

HMRC has since updated guidelines on its website relating to 5MLD, publishing new details on 10 January.

HMRC is asking accountants in the recent letters to supply the following documents:

  • AML Risk Assessment
  • AML Policies, Controls and Procedures
  • AML Training Log

The Remote Compliance department at HMRC,  warns accountants in the letter:

“If you fail to provide the requested documents, we will issue a regulation 66 notice for them. Failure to comply with this would result in a penalty and other possible sanctions.”

The letter outlines how the amount of any such penalty would be calculated, depending on:

  • Why AML rules weren’t followed
  • What you’ve done wrong
  • Past actions
  • Size of your firm

It states: “Once we have reviewed the documents and information, we will contact you to discuss our findings or to request more information/documentation. A face-to-face visit to your business premises may be more appropriate and will be considered. After all the data has been reviewed and our action concluded, we will contact you with the compliance outcome.”

Friday’s web page update, however, strikes a more lenient note on compliance and enforcement.

It says: “While all firms must be fully compliant with the new requirements from 10 January, HMRC will take into account the short lead-in time businesses have had to implement all the new requirements in assessing the response to any non-compliance.”

HMRC also highlights a few “key changes for HMRC customers”.

I have compiled a handy summary of the most important changes contained in the new rules HERE.

IRIS offers a simple solution to AML compliance. IRIS AML enables accountants to perform all aspects of compliance recording and monitoring.

By using it you can manage and document all AML related policies and procedures and implement a risk-based assessment scheme for all your clients.

You see immediately where work is still required, with compliance or non-compliance displayed using simple to read green, amber and red icons.  There are many more easy-to-use features that will save you lots of time and worry. Discover more about IRIS AML here.

You can also watch Steve’s recorded webinar on the new AML rules here.