Money Laundering Regulations


#1

Evening all

Following a ‘conversation’ on another forum, and a telephone call to HMRC I discover that as I do some account work (issue invoices/pay doctors etc) I need to be registered under HMRC MLR.

Has anyone gone through this process lately? Did you have to complete the Fit and Proper Test bit? How long did it take to come through after application?

It’s going to cost a fortune (£120 to register home premises and £50 for F&P test then £120 registration annually).

If I’d realised it was going to cost this I may not have offered to do the accounts!

Dawn


#2

Oof! Not good - I sometimes wonder if these regulations aren’t just a massive box ticking profit making swindle? Like Data Protection - anyone who is trying to massively spam people won’t be discouraged by declaring themselves Data Controllers. But lots of people who are genuinely trying to run a small business will have to cough up for something which has no real meaning.


#3

Hi Dawn
I registered with HMRC when the Regulations first came out, and I don’t recall doing the Fit & Proper Test. I just cough up £120 every year. Sigh.


#4

I registered when it first came out as well and did have to do the fit and proper test, although I seem to think that was because I was offering the mailing address rather than the bookkeeping side of things.

The £120 a year is a bit of a pain but for me I see it as half a years mailing address for one client so it does pay for itself. Basically it is just a stealth tax on people trying to make something of themselves imo.

The process was quite slow to start with as the regs weren’t quite ready and kept being delayed but I don’t remember it taking ages. The fit and proper test only took a couple of weeks if I remember rightly.

Could you not count the work you are doing as financial administration or financial data entry? Obviously not if you are doing VAT returns or something but if you are just entering info onto a spreadsheet or Sage I think i’d be tempted to go down that route at least until custom had built up significantly that the registration pays for itself.

Once you have registered you will need to carry out AML checks on your clients and keep proof of it. If you haven’t got a system for that sorted out yet then let me know and I’ll explain how I do it.


#5

Hi Sally

Thanks for the info.

I did telephone HMRC again the same evening about the Fit and Proper test and apparently don’t need to do that.

I don’t think I will be doing VAT returns at present although one client is registered and does them himself at them moment but like other things, will probably come my way IDC. I think that I have to register now because I am moving money around for one client - I have access to the bank account and pay his clients directly from there, anything from £500 to £6000 per week every week.

To be honest, although I didn’t want to go down this route would p-refer to pay the fee and be covered than not and get fined/taken to court.

I hadn’t heard of AML checks and would be very grateful for any info you can spare on the procedure.

Off to pay the doctors now (before I’m registered!).

Dawn


#6

Part of the regs say you have to prove you have carried out appropriate checks on clients on a risk based method. It doesn’t tell you what checks or how to do them and I spent ages trying to work out what I needed to do to be covered. Basically though you need to proved you have checked the client is who they say they are and that they live where they say they live and that they are not on any politically sensitive lists or have previously been convicted of things like money laundering.

For the mailing address service I need to check they are not known terrorists and that kind of thing also.

After hours of research I now have what I think is a fairly simple system that will protect me from prosecution and keeps in with both the regs and the spirit of them.

When I get anew client I ask them to produce a driving license or something else with their picture on, and a utility bill (not mobile phone bill as these are seen as too easy to set up at other peoples houses).

I then go to www.amlsearch.co.uk and run either an individual or company check on them. To do this you have to register with aml search and to do that you have to prove you are a registered data controller. Once registered you can use their PAYG service so there are no monthly subscriptions or anything. They charge £5 +VAT for a personal search. To carry out the search you need to enter the clients details, including date of birth, address etc. You then upload a scan of the passport/driving license and utility bill. It checks the clients and finds them on electoral registers, the different lists, checks for bank accounts and also, helpfully, checks them for CCJs so you will know if they are a bad payer.

It is NOT a credit check but you do have to inform them you are carrying out the check.

This seems to tick all boxes as far as the Regs are concerned and as long as you keep a record of all of this stuff you can then prove you have done it.

If your client is in a different part of the country from you then you can get them to take a photocopy of their documents and then they can get the bank or someone to stamp them stating they are a true reflection of what they look like etc.

Hope this helps :slight_smile:


#7

Thanks Sally. Will work from there.

Dawn


#8

Hi Dawn, I know it’s the Friday before a bank holiday but you’re talking to Sara, not me. LOL


#9

Sorry to both of you - been a busy week and printers gone up the ying-yang but no excuse to getting names wrong.

Dawn


#10

Lol I did think it a little odd that I typed an essay and you never said thanks!!


#11

Hi ladies and gents

Following the webex that Helen put on about Money Laundering, I registered with HMRC two weeks ago. Having been doing clients’ bookkeeping since 2009 and now realising that I should have been registered and wasn’t, I sent a letter explaining my reasons for not registering previously. I received my MLR certificate a few days later.

A word of warning - I have just opened a letter from HMRC telling me that I am in breach of Regulation 33 for not having been registered since I started offering my services (31/05/09) and 30/06/11 when I registered.

Along with it came a warning of intention to issue a penalty - £304.16 fine! £100 for being in breach and £204.16 fees for the dates I should have been registered and wasn’t.

If you are offering bookkeeping services, advertise and pass the work to someone else to do, or in any way make a profit from financial data entry etc, please stop working for your clients and register before continuing the work.

Off to work some extra hours to pay the fine!

Dawn


#12

Oh Dawn! - how crazy, especially when you are so professional and diligent. I’m so sorry this has happened.


#13

Thanks Janet.

I have just sent a letter in response but don’t hold any hope of the penalty notice being adjusted.

The only thing about it is that the fees of £204.16 I can claim back as expenses but doubt of my accountant will let me claim the fine as one!.

Hey ho - a warning to one and all who offer this type of work.

Just to make sure no more fines, have also just registered with Data Protection.

Dawn


#14

I keep looking at the Data Protection thing. Previously I never fitted into any of the categories for needing to be registered as a Data Controller. Now that I am Clerk to the Governors of a local school (but keeping my contact list of Governors at home), I’m having to look at it again as working in ‘Education’ (no explanation) is given as a reason for registering. I think I’m going to have to phone the DP people. Been putting it off! Thanks for the reminder. Definitely an August job.

Hope you can persuade them of your excellent character and they let you off. All a bit ironic in the light of a report last week that HMRC are too slow to reply to letters and deal with things. They seem to have found the personnel to send you a letter at fair speed!


#15

Response back from HMRC regarding my earlier lack of knowledge regarding registration:

Quote "Thank you for your e-mail below in relation to the ‘Penalty Warning’ letter issued to you on the 26/07/11 for the total amount of £304.16.

I’m afraid registering late and being unaware of the deadlines in which to register is not a reasonable excuse for me to cancel or reduce the penalty. The Money Laundering Regulations 2007 were well publicised at the time they came into existence and it was possible to get information on the HM Revenue and Customs website www.hmrc.gov.uk/mlr. If you had viewed this site you would have seen when you needed to register. In addition to this as many accountants and tax advisors are supervised by the professional body of which they are a member, we decided it would not be appropriate or cost effective to write to every accountant/tax advisor, as most would not be required to register with HMRC. The most efficient, appropriate and cost effective form of communication for HMRC was/is a combination of publicity campaigns (VAT notes, HMRC Agent updates, attendance at educational events and presentations to customers).

The HM Revenue & Customs website provides detailed information on the Money Laundering Regulations and who is required to register. If you are providing accountancy services which include “recording, reviewing, analysis, calculation or reporting of financial information” and/or if you are also deducting national insurance contributions, income tax, etc then you would fall into the definition of an ASP. This means that even if you do not actually handle cash for your clients you still fall under the scope of the regulations therefore you are required to register for Money Laundering purposes as an Accountancy Service Provider.

For further information on registering with HMRC for the Money Laundering Regulations, including business sector guidance can be found on our website at the following addresses: hmrc.gov.uk/mlr/detailed-guidance.htm There is also a VAT, Customs & Excise helpline on 0845 010 9000 for general enquires.

If you are unclear about any of the matters I have raised or need further help please contact me with your concerns and I will try to resolve them with you." Unquote

Fortunately, my accountant advises that I can claim the £204.16 back fees as expenses but will have to pay the fine as a non-expense.

Dawn


#16

Ouch for your fine Dawn!

I’m not planning on doing any bookeeping for my clients, but will have to look if these regulations cover other areas such as receiving money for events or courses and sending invoices on behalf of my clients.


#17

Hi,

I have come across this thread whilst putting in my own questions about money laundering, so I hope it is picked up. I actually input invoice data into Sage software and do bank reconciliations. I think I should go for the money laundering. I dont think amls would be enough?

Cheers

Gill


#18

Even if all you are doing is inputting invoices, you should be registered with a suitable body under the MLRegs. You should also have a MLR policy. I can let you have a copy of one if you email me.

Hope this helps.