Virtual assistants don’t have to register for AML
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?”