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Members In Practice Section

This area is designed for IAB members in practice (those members providing bookkeeping services on a self-employed basis) to give further clarity on the way the IAB discharges its money laundering supervision and monitors members for best practice.

What is a member ‘in practice’?

You are considered to be a member in practice if you offer self-employed bookkeeping, accounting or payroll services to members of the public.

This includes:

  • Sole practitioners
  • Partnerships
  • Limited companies

There is no minimum number of clients – therefore even if you only have one or two clients you are still considered in practice.

If you are on the payroll of a business that employs you for your bookkeeping services and that constitutes 100% of your work, you are not considered to be ‘in practice’.

If you offer your bookkeeping services for no remuneration (i.e. on a voluntary basis) you are not considered to be in practice.

Regulations for members in practice

All members are required to comply with the IAB Framework for Regulations. In addition all members ‘in practice’ are required to follow the IAB Code of Best Practice.

Click here to download the IAB Framework for regulation and Code of Best Practice

The most significant of these regulations for members in practice are:
• Holding an IAB practising certificate (or certificate of AML supervision)
• Compliance with the Money Laundering Regulations 2017.
Evidence of compliance is requested at the point of applying for or renewing a practising certificate. In addition, the IAB may carry out a peer review or monitoring visit – either where insufficient evidence of compliance is demonstrated or on a random basis.

Money Laundering Regulations

The Money Laundering Regulations 2017 apply to any person or business providing bookkeeping, accounting or payroll services to members of the public (referred to as ‘external accountants’ ). The IAB refer to those professionals as ‘members in practice’.

Click here to access the Money Laundering Regulations – statutory instruments.

Guidance has been produced by the Consultative Committee of Accountancy Bodies (CCAB) and is based on law and regulations as of 26 June 2017. It will be published as final when it’s approved by HM Treasury.

The guidance helps accountancy related businesses meet their obligations for money laundering supervision, including customer due diligence, record keeping and reporting suspicious activity.  The guidance can be viewed here.

A legal responsibility of an external accountant  or bookkeeper is to register with an anti-money laundering (AML) supervisor.

The IAB is one of the 22 Professional Bodies who have been granted supervisory status under the Money Laundering Regulations 2017 by UK Parliament. The Association monitors members for compliance with the AML Legislation.

Those practitioners who are not members of a professional association can appoint HMRC as their AML supervisor. However, members of the IAB should appoint the IAB as their AML supervisor.

The only exception is if you are already supervised by another Supervisory Body, this should be declared to the IAB as you do not need to hold supervision with more than one body. In this instance you should complete the application for exemption form which can be found below.

How do I appoint the IAB as my AML supervisor?

You appoint the IAB as your AML supervisor by applying for a practising certificate*.

At the IAB we combine the monitoring of compliance with the IAB’s regulations with the supervision of members for AML in one certificate.

The cost of the practising certificate is in addition to the annual membership fee.

How do I apply for a practising certificate?

Use the application forms below.

Money Laundering Supervision is granted immediately upon receiving an application (and payment being made). The IAB will then assess the member’s compliance with the regulations, and where shortfalls are identified, work with the member to rectify them.

*Please note that if you are an Associate of the IAB you will receive an IAB Certificate of AML supervision rather than a practising certificate.

If you are unsure if you need to apply for a practising certificate contact the IAB Compliance team at compliance@iab.org.uk.

Guidance for members in practice

The IAB requires all members in practice to provide evidence that they are complying with their obligations to:

To assist in understanding these obligations there is a short guide that gives help and advice.

Click here to download the IAB Guidance for members in practice

Being a pdf document, the guide is printable. However, as it contains many useful hyperlinks to IAB resources and other websites you may prefer to keep it in electronic format.

Continuing Professional Development

All members of the IAB must be prepared to maintain high standards of professional education. Finance professionals face a continual flow of new and updated legislation and regulations, accounting standards, and acceptable accountancy practice procedures, and IAB members must be cognisant of these and other technical matters and their impact on bookkeepers, clients and/or employers.

Keeping a record of your ongoing learning and accruing Continuing Professional Development (CPD) points for it, is a method of demonstrating that your technical and professional competence is relevant and up-to-date.

Therefore the IAB has established this set of guidelines to help members appreciate what is required of them:

IAB CPD Requirements

The IAB has developed a spreadsheet that can be used to record CPD, as members in practice are required to provide this to the IAB at the point of applying for or renewing a practicing certificate.

Download the spreadsheet to your PC using the following link:

IAB CPD Record Sheet 

Practice Example documents

The IAB is dedicated to help its members in practice to meet their obligations under the Money Laundering Regulations 2017.  To this end we provide standard templates for Letter of Engagements and Client Checklists to name but a few. A full list of these document can be accessed by following this link: Members in Practice Example Documents

Professional Indemnity Insurance

Professional Indemnity Insurance (PII) covers bookkeeping practitioners in the event of client claims of negligence, errors and omissions. PII protects the practice against compensation that may be sought by a client if the bookkeeper or their practice has made mistakes or is found to have been negligent in any aspect of their work relating to that client. PII is mandatory even if you are providing limited bookkeeping services to just one client and that person is a friend or relative. The IAB do not need to see the entire policy – just the certificate showing the dates of cover.

PII is available from various specialist organisations, but members of the IAB have access to a preferential PII scheme, details of which can be found using the following link:

IAB Professional indemnity insurance partners

If you are ceasing your self-employed bookkeeping business it is recommended that you continue your professional indemnity insurance for a period of time after stopping practicing to cover you for the possibility that a client may make a retrospective claim. This is known as ‘run off’ insurance. The period of time ‘run off’ insurance is taken out will depend upon the nature of your business, the number of clients you had and the risk that a retrospective claim may take place.

The Anti-Money Laundering Compliance Company (AMLCC)

The IAB has partnered with the Anti-Money Laundering Compliance Company (AMLCC). AMLCC is an online system that aids practices with the compliance with anti-money laundering regulations.

It provides:

  • Training for all staff members to help them become acquainted with, and stay up-to-date with any changes in the AML regulation
  • Client risk assessments
  • Equifax checks
  • Storage of all client details, copies of ID etc.

The AMLCC system is free to use for all IAB members in practice (with the exception of Equifax checks). Access to the system will be given once the initial application for a practicing certificate has been accepted. This process can take up to 7 days from the point the initial application.

Use the following link for instructions on registering with AMLCC:

AMLCC – How to Register

DBS checks

Rules have been introduced relating to sole traders, officers, managers and beneficial owners needing to provide basic information and proof of identity so that a Disclosure and Barring Service (DBS) check can be carried out.  This is to ensure you don’t have any criminal convictions which are unspent and which could impact on your ability to practice under the Money Laundering Regulations.

For Accountancy Service Providers the requirements are set out in Regulation 26 of the MLRs.  This stops a person with criminal convictions who is listed in Schedule 3 of the regulations from being a sole proprietor, manager, officer or beneficial owner.

In line with the other supervisors, as a member in practice you will be required to have a DBS check when you renew or apply for your practising certificate or certificate of AML supervision.  You will need to make an application for a DBS check before we can issue you with your practising certificate.

Once you have had the DBS check we will only be able to continue to supervise those members who do not have a relevant criminal conviction.

Please find below some FAQs and the action which you will need to take in relation to this.

ACTION TO TAKE:

When you apply for or renew your practising certificate or certificate of AML supervision there will be a question asking whether you have made an application for a DBS check.  We are only asking members to have the DBS check once and if you are currently supervised by the IAB you don’t need to do this until your supervision is due for renewal.

You can make the application through the government website. The system will automatically verify your ID and carry out the DBS check.  Once the check has been completed you will then receive confirmation which you would then need to send to us when you renew your practising certificate or certificate of AML supervision so that we can update our records.

To make the application for a basic DBS check via the Government website please click on the relevant link below:

If you live in England or Wales please see: https://www.gov.uk/request-copy-criminal-record

If you live in Scotland please see: https://www.mygov.scot/basic-disclosure/apply-for-basic-disclosure/

If you live in Northern Ireland please see: https://www.nidirect.gov.uk/campaigns/accessni-criminal-record-checks

FAQs:

If I have previously had a DBS check do I still need to have another check carried out?

If you have had a DBS check carried out in the past 12 months then you will not need to have another check.  You will just need to provide us with a copy of the document confirming that you have had a DBS check.

How often does the DBS check need to be carried out?

We only require members to have the DBS check once so you won’t have to renew it each year, unless there are any changes.  Moving forward the DBS check will need to be completed when you renew or apply for your practising certificate or certificate of AML supervision on or after the 26th June.

If I only have a small handful of clients will I still need to have a DBS check?

Yes, no matter how many clients you have you will still need to have a DBS check.  The regulations state that any sole proprietor, manager, officer or beneficial owner will need to go through this process.

What is a relevant criminal conviction?

The main concern is relating to serious convictions such as fraud.  For instance if the DBS check uncovered a criminal conviction for fraud then we would no longer be able to issue you with a practising certificate or certificate of AML supervision and therefore, legally you would not be allowed to operate as a sole trader, officer, manager or beneficial owner of a company.   It is also likely that you would no longer be able to be a professional member with the IAB.

What is the definition of a beneficial owner, manager or officer?

A beneficial owner includes a person who controls more than 25% of the shares or voting rights of a company.  Further information can be found via the following links: regulation 5 and regulation 6.

An officer includes someone who is a director, secretary or partner.  Further information can be found here: regulation 3.

A manager is the Money Laundering Reporting Officer (MLRO) of a practice.

What do I need to do if there are other people working in my practice as officers, managers or beneficial owners?

Under the new rules all officers, managers and beneficial owners in your practice will need to have a DBS check.  Please note the IAB does not need to see copies of the DBS checks for anyone else working in your practice.  We only need to see a copy of your DBS check as a member in practice.

Application forms for practising certificate

Click here if you are renewing an existing practising certificate

Click here if you are applying for a practising certificate for the first time

If you are an overseas member looking to apply please contact the compliance department before completing the forms. Please email compliance@iab.org.uk.

Application for exemption

If you are in practice in the UK you may be eligible for exemption from holding a practising certificate with the IAB if you hold a current practising certificate with another professional body recognised by the IAB.

If this is the case, please complete the form below and send it with a copy of your practising certificate to the IAB for review.

Click here to download the form to apply for exemption (Microsoft Word format)

Please note that having AML supervision with HMRC does not exempt you from holding a practising certificate with the IAB. If you currently have AML supervision with HMRC you must:

You will be given an extension to your IAB practising certificate that will run for one year after the expiration of your HMRC certificate.

For further information on IAB compliance please contact the Compliance Department on compliance@iab.org.uk  or 01732 897756.