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Virtual assistants don’t have to register for AML

9th May 2019
Editor AccountingWEB
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Office filing and admin

While the rest of the profession faces increasing AML scrutiny, virtual assistants can rest easy without having to register with HMRC under money laundering regulations.

HMRC has updated its money laundering guidance for accountancy providers to add a registration concession for 'virtual assistants'.

Virtual assistants are defined by HMRC as entities where no more than 5% of total business turnover applies to accountancy service activities. In other words, virtual assistants are only supposed to have a tangential relationship with accountancy.

The guidance also states that people or organisations fall into the virtual assistant category if the accountancy services provided support the main business activity, rather than being its raison d'être.

For the avoidance of any confusion, the ACCA’s Glenn Collins provided AccountingWEB with a definitive definition of virtual assistants as entities that provide "administrative support and undertake ancillary recordkeeping services.

"Many [virtual assistants] are involved in invoice administration (chasing, issuing and paying) which HMRC recognises may cause confusion from bookkeeping services,” said Collins.

The change is unlikely to impact accountants, noted Collins. “Possibly only if they come across someone that isn’t registered and should be under the rules or are, in fact, exempt.”

For a virtual assistant to claim the concession, HMRC stipulates that their work is reviewed by an accountant or bookkeeper who is registered for money laundering supervision.

Virtual assistants claiming the concession should anticipate a visit from HMRC to ensure the qualifying conditions are actually being met.

The AML crackdown continues

However, the concession is by no means a climbdown by HMRC over its recent AML robustness. Far from it. The department continues to crack down on money laundering non-compliance.

Recent figures from financial services regulator consultancy FSCom Ltd show that HMRC's AML fines increased last year to £2.3m – a 91% rise.

The average size of the fine rose from £1,310 in 2017 to £3,450 last year; less of an arbitrary hike but more down to HMRC targeting serious breaches.

Accountants under HMRC supervision for AML are likely to already be aware of how the department’s more robust approach to supervision is funded, as existing renewal fees increase this month to £300 per premises.

Lack of enforcement

However, HMRC is not the only regulator under mounting pressure to enforce AML supervision.

The Office of Professional Body Anti Money Laundering Supervision (OPBAS) – a supervisor for the supervisors – used its one-year anniversary to bash the regulators’ lack of enforcement and for having more concern over member retention than scrutiny.

Virtual assistants may not need to sharpen their AML obligations, but accountants in practice now have to address theirs in order to keep the supervisors at bay.  

Helpfully, AML expert Richard Simms has provided some practical tips for accountants in an Industry Insight post for the ICPA. Time and resource are essential to AML success, but Simms said that it also takes a willingness not to turn a blind eye to the obvious.

“When you’re considering any AML situation, there’s an imaginary person reviewing your actions and casting an independent eye over your decision making. If you’re questioning your own decision making, ask yourself what the independent person would say?”

Replies (2)

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jo sparkes
By josparkes
10th May 2019 17:07

As one of the people who entered into negotiation with HMRC for nearly two years to reach agreement on this concession I was very surprised to be directed to your article with its clickbait type heading.

HMRC do not define a virtual assistant at all. They define a possible concession for those who consider virtual assistance to be their business and where a set of conditions also applies. Virtual Assistant is not a job title, but a way of working, and your title and first paragraphs are highly inaccurate.

Virtual Assistants “in your profession” will still have to register for supervision in the same way as “the rest of the profession” do now. Offering bookkeeping as a service still requires the same supervision as other bookkeepers. Nothing has changed.

We wanted to help VAs who offer administrative services such as invoicing or listing of expenses. Until cloud accountancy systems became the norm, admin assistants would create invoices in a manual document but they wouldn’t touch the daybooks of the business. These days creating an invoice and saving to the daybooks is often one simultaneous action. This caused issues for the HMRC definition of a bookkeeper, which is someone who affects the daybooks. They did not and do not consider invoicing to be a bookkeeping activity. Affecting the daybooks is - so admin assistants were being drawn in to MLR supervison.

Most bookkeepers/accountants don’t want to be creating and sending invoices on a daily basis but there are other third-party service providers willing to cover this role. The concession is not designed for anyone to be carrying out unqualified bookkeeping services, it’s for someone that is turning over less than £125 a month on daybook affecting activities. I hardly think they are “in your profession”!

Thanks (1)
By Balancing
22nd May 2019 22:00

I wonder if the AML scrutiny is just another tax and little more than that. 'Regulatory' bodies, in my experience, are not interested in regulating. So are we just paying peoples wages and for fancy offices for more administration to take fees.

Companies House website does not seem to show signatures anymore and companies can file abbreviated accounts - so much less chance of checking out dodgy behaviour there as well.

Please tell me this is not just a show of regulation to take money. Pick on the lowly people ofcourse as they are more easily frightened and can be pushed around, whilst letting the 'big boys' and freemasons no doubt get away with whatever they like.

Please tell me this is not the case.

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