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Path leading to different opinions AccountingWEB Is there anything positive to say about AML compliance?
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Is there anything positive about AML compliance?

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Anti-money laundering compliance is seen as burdensome and so is often neglected. However, David Winch encourages the AccountingWEB community to recognise its potential for providing valuable insights to practitioners.

19th Feb 2024
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David Winch, director of MLRO Support Limited and an upcoming speaker at the Festival of Accounting & Bookkeeping (FAB), took to Any Answers to ask the community whether they had anything positive to say about anti-money laundering (AML) compliance

He wrote, “I know everyone loves to hate AML compliance but I would be interested to hear your views on ways in which the burdens of complying with AML obligations have yielded useful information or insights for you. Or is there really nothing positive to say?”

This question comes ahead of the “State of the Nation: AML in 2024” session at FAB where Winch will be joined by Mark Evans, technical consultant at Mercia, and Rebecca Williams, director of Eccounting Made Easy, to talk about all things AML. 

Winch explained that following AML requirements can make practitioners think about their firm and what it stands for, which can lead to some helpful insights. “I hope that know-your-client (KYC) information can be useful in helping to identify additional (chargeable) services the firm can provide to its clients.”

With some accountants spending “their time in the business and none on the business”, Winch said that they are then, “unable to articulate the nature of their firm and what it uniquely offers to existing and prospective clients”. 

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Replies (59)

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the sea otter
By memyself-eye
20th Feb 2024 08:15

Quick answer - NO.

Thanks (10)
Ray McCann
By Ray McCann
20th Feb 2024 09:36

Those who whinge about AML compliance need to get real. Most of it you would or should do in any event. Even if AML requirements did not exist you would still have to know your client. Otherwise you potentially already have one foot in a prison cell.

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Replying to RayM55:
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By johnjenkins
20th Feb 2024 09:55

Ray you are spot on, however we don't need to be treated like children and told what we must do, when being a fully trained Accountant gives us the tools needed to know our client. What happens to reports anyway? Nothing. It's the same as HMRC saying that they need MTD to prove business are doing things digitally, never mind the ongoing Post Office saga.
It's all about control and not about stopping scammers, drug Barons and money launderers.

Thanks (11)
Replying to johnjenkins:
Ray McCann
By Ray McCann
21st Feb 2024 12:38

The rules are tougher if you are not a member of a recognised professional body but the reality is that we are where we are because in the past far too many paid lip service to the earlier versions of AML compliance requirements.

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Replying to RayM55:
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By Rob Swan
21st Feb 2024 14:36

If you are not a member of a professional body you can register with HMRC as your AML/MLR Supervisor - costs a few pounds and actually you're far less likely to ever be bothered with an MLR inspection.
BTW HMRC's own version of an AML/MLR manual - freely downloadable from gov.uk - is the simplest and most clearly explained I've seen.

Thanks (1)
Replying to RayM55:
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By Rob Swan
20th Feb 2024 11:21

Ray McCann,
The problem is the huge admin burden and pointless (self defeating) rejection of reasonable common sense. (eg, Rgab1947 being told to validate his wife!!). Treat professional adults like children and (eventually) they'll behave like chidren - self defeating.

Thanks (7)
Replying to Rob Swan:
Ray McCann
By Ray McCann
22nd Feb 2024 15:28

You have a set of rules, you apply those rules in the circumstances required. I recognise that carrying out AML checks on your wife is daft in normal circumstances but if you loosen the rules in these types of situations then it inevitably become I don't need to check the wife, daughter, daughter's boyfriend, his Uncle Ivan, Ivan's mate Boris, and so on.

Thanks (1)
Replying to Rob Swan:
Ray McCann
By Ray McCann
22nd Feb 2024 15:28

You have a set of rules, you apply those rules in the circumstances required. I recognise that carrying out AML checks on your wife is daft in normal circumstances but if you loosen the rules in these types of situations then it inevitably become I don't need to check the wife, daughter, daughter's boyfriend, his Uncle Ivan, Ivan's mate Boris, and so on.

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Replying to RayM55:
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By BryanS1958
22nd Feb 2024 15:45

But there is no need for the set of rules. They are almost as pointless as someone having to prove their wife is their wife, or their sister is their sister.

Thanks (2)
Replying to RayM55:
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By Rob Swan
22nd Feb 2024 17:03

Ivan's mate Boris. Hmm.... OK, I'll give you that one Ray ;)

Thanks (2)
Johny Fartpants Picture
By johnny fartpants
20th Feb 2024 10:08

Another no from me. In response to Ray's post, I already knew my clients thank you very much. I don't know them any better for having filled in an "annual review form" each year, carried out a firm wide risk assessment each year, then having to complete an annual compliance review on myself, then completed an online AML annual firm review each year, then made sure all staff having received adequate AML training each year, then ..........

After all of the above, any sign of non-compliance is rewarded with a hefty fine. You can see why most hate it.

Yes, there is a need for regulation but this is all too much.

Behind the difficulties of having to deal with HMRC's woeful systems, AML is surely the second worst part of the job these days.

Thanks (14)
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By BryanS1958
20th Feb 2024 10:17

Likewise, my vote is NO.

Yet another click bait ad for FAB. I could think of nothing worse than going to FAB and listening to someone drone on about AML. I prefer to concentrate on areas that matter to my clients e.g. keeping their tax as low as legally possible.

Thanks (9)
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By JD
20th Feb 2024 10:36

Like many small firms, we have visited the business, met the client(s), often enjoy the company of the complete family, and understand how the business works long before they become clients. No amount of box ticking, collection of of ID or know your client systems will result in us knowing our clients better or stop any risk of ML.

In line with the approach that Governments of all colours take in so many areas of life (including MTD). It is easier and cheaper for them to place excessive (digital) administrative and ineffective burden on the compliant, rather than apply resources to those that are not. In this case the NCA just need to do their job with the mountain of information they already hold.

Thanks (8)
Replying to JD:
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By RogerMT
22nd Feb 2024 11:43

"In this case the NCA just need to do their job with the mountain of information they already hold." In our profession's case they need to actually look at that mountain of reports we send them, and acknowledge they've done so. That would make this time consuming nonsense seem at least partly worthwhile.

Thanks (1)
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By Rgab1947
20th Feb 2024 10:47

What I found amusing is the response from a legal AML expert who said that I had to verify my wife (She was a sole trader client) and get ID and do a risk assessment.

Off course I did all that LOL.

Thanks (5)
Replying to Verified:
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By johnjenkins
20th Feb 2024 11:57

How did this slip through?

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Replying to johnjenkins:
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By johnjenkins
20th Feb 2024 15:08

It didn't. lol

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Replying to Rgab1947:
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By BryanS1958
21st Feb 2024 16:11

My broker had a similar problem with his sister. She didn't have a passport, driving licence or other documents to prove her ID and address. He therefore couldn't prove that she was who she said she was and he couldn't get her a mortgage!

The lunatics are running the asylum and we are forced to join them.

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By Maxholt
20th Feb 2024 10:48

I fail to see any positives for accountants and/or bookkeepers; however, what I do see is that it has and continues to serve very well as a job creation scheme - there are now so many companies that exist that make money out of providing software, etc - aimed at helping us to be compliant.
We have to work longer hours to pay the licence fee to be monitored, and then subscription fees, fees for AML/biometric checks, annual training, etc, etc.

Thanks (9)
Replying to Maxholt:
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By johnjenkins
20th Feb 2024 11:26

It is little wonder many Accountants are leaving (retiring). I'm 75, love the work but could well retire in 2026, because with MTD and compliance it will be a nightmare.

Thanks (4)
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By Postingcomments
20th Feb 2024 11:13

Given the way that the professional bodies shamelessly pander to the government and HMRC, I'm not surprised by Ray's view.

I am a little disappointed at the demeaning way in which he expresses it. Dismissing dissenting opinions as "whinging". If he really does feel that is the most appropriate word, that tells us a lot about him and, most likely, the Institutes.

We are forced (under threat of fines) to spend many hours a year on a mainly pointless exercise takes a lot away from ourselves, our practices and our clients. Dismissing that as "whinging" shows a very poor choice of words or a complete lack of understanding. Either way, I think it is telling that our professional bodies are presiding over by people like this. I'm sure his toadying will be rewarded with some letters from the King at some point. Well done.

Thanks (7)
Replying to Postingcomments:
Ray McCann
By Ray McCann
21st Feb 2024 12:45

See my response above, AML requirements are designed by Civil Servants with little or no hands on client experience. What they do have is hundreds of examples of accountants, tax advisers and others turning a blind eye to things that should be reported or not taking sufficient interest in sources of wealth and so on.

So to a large extent we are all paying for the bad behaviour of a few. Equally, the vast majority of what I have done over the years has been to advise in situations where clients have happily pulled the wool over their trusted adviser’s eyes for years. And every time that happens it simply gives the Treasury more ammunition to make like more difficult still for us all.

Thanks (0)
Replying to RayM55:
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By BryanS1958
21st Feb 2024 16:20

What the lazy bureauprats and jobsworths want is for everyone to do their job for them.

Criminals can easily run rings around all these checks, as far as I am aware there is no evidence that they are working. Therefore what we are being forced to do is an expensive and meaningless exercise. The time and money would be better spent elsewhere.

The professional bodies do of course lap up all these initiatives and never say no to any of them on behalf of their members. They should be more French (that is a positive comment, not a negative one in this scenario!) and ask their members to strike and say no to AML, MTD and all the other nonsense.

Thanks (2)
Replying to BryanS1958:
Ray McCann
By Ray McCann
21st Feb 2024 22:33

Good luck with that, having worked with French Tax Inspectors at various times, be careful what you wish for.

Thanks (0)
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By Rob Swan
20th Feb 2024 11:14

No, NO... NO!!!
As others say, It's just desk jockeys in the civil service creating pointless admin, telling perfectly competent professionals HOW to do jobs, (which most do anyway), instead of WHAT to do effetively. In practice, the tighter the regulations and the more burdensome the associated admin, the worse the problem generally becomes. In practice, AML puts the emphasis and burden on the admin, and takes valuable time away from doing a 'proper' job. Not many who are subject to AML compliance see any benefit and I'm pretty sure I'm not the only one who's met a few who (in private) admit they don't understand it.
PS. AML didn't stop London (The City) being known as 'Putin's Laundromat'.

Thanks (7)
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By raybackler
20th Feb 2024 11:36

I have dealt with my current clients for many years and know their businesses and personal circumstances very well. The few disengagements I have made since starting the practice arise within the first year of working with a new client. That is when you find out anything dodgy, usually through a reluctance to provide information. The AML process does not help with this at all. It is all about knowing your client in much more detail than required by AML. It is called developing a business relationship.

Thanks (7)
the sea otter
By memyself-eye
20th Feb 2024 13:38

Right, opinions are divided on this one then. Could go either way (like any by-election this year).
As I need certainty, I'm off to buy a double cab pick up!

Thanks (1)
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By indomitable
20th Feb 2024 13:42

Absolutely No No and No

What a load on 'nonsense' in my view. AML is a hammer to crack a nut!! The black economy is thriving. So much much fraud in the bounce back loan debacle! AML is easy to pass if you are a real criminal. Still lots of money sloshing around in the city and property from lets just say less scrupulous multi billionaires!

The government just trying to outsource their responsibilities to professionals! And who does it catch? Do you think any serious money launderer for instance on any sanctions list is going to rock up to a high street accountant and ask for help.

A complete and utter waste of time. Catches very small fry. Government needs to crack down on the real issues.

Typical government thinking! Trying to be seen to be doing something that is just not effective but can say they are doing something.

The whole regime needs rethinking. Client opens a bank account - KYC checks done, applies for passport - KYC done, buys a house - KYC done, Engages a lawyer - KYC done

What an utter waste of time and resources!! There should be a central database at the very least!!

Thanks (4)
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By GHarr497688
20th Feb 2024 14:07

It's great to make sure your data base of information is correct and that you know who you are dealing with and what they are about. Also great to feel assured you'r not party to a crime and might save a life.

I can't see anything wrong with AML apart from the fact Accountants might not being doing what they should to comply and getting away with it....

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Replying to GHarr497688:
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By BryanS1958
20th Feb 2024 14:26

How does it make sure your database of information is correct?

How are you assured that you are not a party to a crime and might save a life?

We are just repeating ad infinitum checks that have already been carried out by banks, solicitors, estate agents, etc and those that should be carried out, but are not, by government departments. A completely pointless exercise that is costing the country millions, if not billions.

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Replying to BryanS1958:
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By johnjenkins
20th Feb 2024 15:16

Why is it that everything Accountants think is wrong HMRC go and do it and everything we think is right HMRC won't do it.
IR35 - load of rubbish
MTD - load of rubbish
AML - load of rubbish
RTI - load of rubbish
etc. etc.
Agent strategy - brilliant, where is it?
I could go on but what is the point.

Thanks (3)
Replying to johnjenkins:
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By GHarr497688
20th Feb 2024 21:33

I will agree apart from AML - having had a visit and seeing the reality of matters AML is important to stop criminal intent or being party to such intent.

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Replying to GHarr497688:
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By johnjenkins
21st Feb 2024 09:27

But it doesn't stop criminal intent. It doesn't stop anything. In fact since AML was introduced money crime has increased.

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Replying to BryanS1958:
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By GHarr497688
20th Feb 2024 21:31

Checking ID and then checking with my database makes sure records are up to date.
I know because I had an AML visit and was picked up on this. FACT.

By doing proper work on AML you might discover a criminal that could in turn lead to the detection of a people smuggler or similar which could in turn save the life somewhere within the crime.

Multiple checks will alert the agencies if data shows many agency's coming up with potential criminal activities thus preventing criminal activity.

You clearly don't understand the objective.

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Replying to GHarr497688:
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By BryanS1958
21st Feb 2024 10:17

I do understand the objective. Spending thousands of hours and millions of pounds aimlessly checking ID and addresses, when banks, solicitors, estate agents, banks and investment institutions have already done exactly the same thing doesn't achieve it.

I cannot recall thousands, or even hundreds (or even tens for that matter) of criminals being caught by all the box ticking and form filling efforts of accountants. So,until proven otherwise, in my view it is an entirely pointless exercise.

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Replying to BryanS1958:
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By GHarr497688
21st Feb 2024 13:17

The way it works is collecting intelligence that leads to criminal conviction and if just one case is discovered that's a result and the very fact that the laws are in place slows up the "crooked" accountant or client going to multiple professionals to try and slip through the law. Suppose a take-away was laundering cash to fund arms to a terrorist country using criminal property and a contrived arrangement using a Solicitor , Estate Agent and Accountant then somewhere along the line a report to the relevant might be lodged to the NCA which would then link to say another report filed to the NCA which would result in the crime being detected . If you want proof read the NCA Newsletter that will give examples.

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Replying to GHarr497688:
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By johnjenkins
21st Feb 2024 15:44

So are you saying before AML there was no intelligence collecting and no criminal conviction regarding dodgy Accountants et al?
My view is that we don't need AML to catch criminals and we never have had.
As I have said many times we are in a period of stagnation and until all these restrictions are lifted small business (who form the basis of our economy) will disappear.

Thanks (2)
Replying to GHarr497688:
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By BryanS1958
21st Feb 2024 16:26

But what is the cost v benefit?

I am not aware of many cases where there is a successful conviction, or other proof that AML is working. An NCA Newsletter is only going to give the hype, no real stats.

Thanks (1)
Replying to GHarr497688:
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By BryanS1958
21st Feb 2024 16:26

But what is the cost v benefit?

I am not aware of many cases where there is a successful conviction, or other proof that AML is working. An NCA Newsletter is only going to give the hype, no real stats.

Thanks (1)
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By raybackler
20th Feb 2024 15:51

Let me see:

Cash only car washes
Takeaways - cash only
Cafés and restaurants - no cards allowed
Cash only trades - we'll split the VAT Guv
Farm workers living in caravans - RTI - never heard of it

Scratching the surface, because there are many more examples. The point is that these are the small businesses that should be aimed at, not just for AML reasons. How about workers being paid below the minimum wage, for instance, with no payroll records. These type of businesses are everywhere and I am sure that many fulfil all of their legal obligations, but many don't. AML should be targeted, not a huge blanket to throw over a problem that doesn't exist for the vast majority of clients. Most of my clients have wholly UK turnover and no cash handling, because it allows me to sleep at night.

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Replying to raybackler:
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By johnjenkins
20th Feb 2024 16:00

Why are you having a pop at the small guy who is doing the same as the big guy only on a smaller scale. Getting bonuses for putting innocent people in nick, yer that's a good one.

Thanks (1)
Replying to johnjenkins:
the sea otter
By memyself-eye
20th Feb 2024 17:53

Enhance your calm John (Spartan)*.. at 75 you should be uncaring about all this 'stuff'.
Christ, I'm a youngster at nearly 70 and I don't give a s...

* Sylvester Stallone and Sandra Bullock - I forget the name of the film!

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Replying to memyself-eye:
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By mohammedshoaib
21st Feb 2024 07:03

Demolition man.
That was witty

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Replying to mohammedshoaib:
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By johnjenkins
21st Feb 2024 09:30

John Almighty might be better.

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Replying to memyself-eye:
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By johnjenkins
21st Feb 2024 09:36

Unfortunately I am a caring person who loves my profession and work. To watch Government allow HMRC to destroy the one man band business (in whatever guise) makes me sad and angry.

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Replying to johnjenkins:
Ray McCann
By Ray McCann
22nd Feb 2024 09:48

I am as critical of HMRC as most but get a grip. Small business is responsible for most of the tax evasion gap, it always has been. How HMRC are putting one man bands out of business is beyond me.

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Replying to RayM55:
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By johnjenkins
22nd Feb 2024 10:09

Really? You must live in a different world to the rest of us. Ask yourself why one man band Accountants are leaving the profession?
Get your hat and coat on and go and have a look at high streets and count how many units are empty (yes I know there are other reasons as well).
So what I am saying Ray, is, get out of your ivory tower and wake up to the reality of what is happening. Believe me, Ray, if MTD goes ahead that will be the nail in the coffin. Then watch prices go up.

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Replying to johnjenkins:
Ray McCann
By Ray McCann
23rd Feb 2024 10:51

None of that explains how one man bands are being put out of business other than due to those involved not wanting the hassle. There are lots of reasons why a one man band would give up, AML etc is simply part of it.

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Replying to RayM55:
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By johnjenkins
23rd Feb 2024 12:18

You forget MTD and IR35 to mention 2.

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Replying to RayM55:
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By BryanS1958
23rd Feb 2024 16:31

Even HMRC has now confirmed that it will cost landlords and sole traders £350 to set up for MTD ITSA. Their rationale is "MTD for ITSA is intended to help businesses get their tax right, with mandatory use of digital record keeping and using MTD compatible software to provide updates and returns digitally." Do they actually believe this?

The estimated cost is, as usual hopelessly underestimated. The anticipated benefits are hopelessly overestimated. Any software operates on a GIGO basis (garbage in, garbage out).

The same applies to AML, estimated cost was hopelessly underestimated. The cost v benefit hopelessly overestimated.

The CIOT and ICAEW sit on their hands and say nothing, apart from suggesting technical tweaks. When are the professional bodies going to learn to tell the government departments that they shouldn't fiddle with things they don't understand?

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