AML: How to spot crime in clients' records
Accountants and tax advisers have been warned of five crime indicators when looking at client’s accounting records.
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Seems an odd way round of holding the briefing. I would have thought generally that accountants would be better placed to advise the police on signs of suspicious activity indicated by anomalies in the accounting records.
Wow, mind blowing. The Police telling us what to look for based on real life investigations. Now let me think. What profession were the people that carried out these investigations? Could it possibly, just possibly have been the Accountancy profession? Nah we don't know what to look for, do we?
The bounce back scandal is purely down to banks not doing their job properly. How can you give a company a bounce back loan based on turnover (which the banks know) when they have just started?
I could name plenty of scams but I will only mention one. Dummy invoices, then cheque made out to whoever (not so much these days as BACS etc. is used but variations have been seen).
Good points well made, regrettably using the 5 red flag points made above, most small businesses tick all of the 5 boxes.
The biggest money laundering racket I repeatedly come across is HMRC; but who do I report their incompetence to? HMRC persistently failing to chase clients with huge outstanding tax and VAT liabilities, so the client is engaged in tax evasion by default due to HMRC incompetence!
Simple example, take on new client on a Friday morning who urgently requires me to deal with HMRC as her bankruptcy petition is in the High Court the following Monday. Manage to get HMRC to agree to a 2 week delay during which I get PITA client up to date with all her missing accounts and tax returns. I even got her to pay HMRC all the tax/interest/penalties that she had owed them for years. HMRC not particularly grateful, neither was the client.
Next tax year, she rings me a 18:20 on 31/01 to tell me that she hopes to send me some of her accounts stuff shortly and aims to send me the rest of the stuff before midnight! She misses the filing deadline and has a hissy fit. The next day she sends me a stroppy email telling me she is dissatisfied with my services, and wants to go back to her previous accountant who she ended up in the bankruptcy courts with. Couldn't have been more delighted. Disengaged and professional clearance letter sent to previous accountants.
Yesterday I received a letter from HMRC relating to said client, advising me that she no longer (according to their records) needs to file tax returns. Their logic being that she hasn't filed a single tax return since the ones I filed for her to avoid bankruptcy. That was 5 years ago and she is still earning in excess of £120k/annum but HMRC don't seem to be able to figure that out. One quick google search would reveal to HMRC that she continues to practice her profession.
Oddly Time Income.
With Lockdown , the sale of a pie and a pint at my local at 7 p.m. might constitute some other criminal activity ??
Is the failure to keep accounting records a criminal offence? Its something which can be subject to a penalty by HMRC but is it a criminal offence?