Money Laundering Regulations – who do they apply to?

Money Laundering Regulations – who do they apply to?

The Money Laundering Regulations 2017 apply to persons acting in the course of business carried on by them in the United Kingdom, as:

  1. credit institutions;
  2. financial institutions;
  3. auditors, insolvency practitioners, external accountants and tax advisers;
  4. independent legal professionals;
  5. trust or company service providers;
  6. estate agents;
  7. high value dealers;
  8. casinos

For the accounting sector, the relevant business is ‘external accountants’ which also includes bookkeepers. The regulations may apply based on the following situations:

If you are providing bookkeeping/accounting services to members of the public (including friends and family) as:The regulations
do applydon’t apply
 

a sole trader

 

 

 

 

as a limited company, LLP or partnership where you are a beneficial owner of the practice

 

as an employee on the payroll of the business for whom you work 

 

 

on a voluntary basis

 

 

If the regulations apply to you, and you are a member of a professional association that is also approved as an AML supervisor (such as the IAB), you must activate your AML supervision with that association as your supervisor by registering as a member in practice.

Only when you are not a member of an approved professional association should you appoint HMRC as your AML supervisor.

For further examples of where the regulations apply please click on the option below.

Further information about the regulations can also be found here.

Further examples of where the regulations apply

If you are still unsure whether you are considered to be an external bookkeeper (in practice) please refer to the following examples:

 The regulations
do apply      don’t        apply
 

I have a number of clients for whom I provide bookkeeper services and I’m registered as a sole trader. I invoice my clients for my time.

If you invoice your clients for your services you are considered to be self-employed and therefore the regulations apply to you.

 

 

 

I work for a company doing their bookkeeping/accounts. I am on their payroll.

The regulations don’t apply to you as long as 100% of your bookkeeping/accounting work is for your employer.

 

 

 

I work for one company doing their bookkeeping/accounts however I am not on their payroll. I invoice them for my time.

As you are not on the payroll of your employer you are considered to be an external bookkeeper and the regulations apply to you.

 

 

 

All of my customers are accountancy service providers.

If all of your customers are accountancy service providers supervised by HMRC or a professional body, you do not need to register so long as:

  • you do not do business directly with the supervised accountancy service providers’ own customers
  • you’re included in the supervised accountancy service providers’ anti money laundering controls and procedures, suspicious activity reporting, and training programmes
  • you have a written contract with each of your customers confirming that every aspect of the relationship between you meets all anti money laundering requirements

You need to meet all of these conditions, otherwise you’ll need to register.

 

 

 

 

 

I run my own bookkeeping practice. It is registered as a limited company and I am on the payroll of that company.

If you have the controlling ownership of the practice, or benefit from the profits of that practice, you are considered to be in external practice and therefore the regulations apply to you.

 

 

 

I am working as bookkeeper for myself but only have a few clients.

Even if you only have one client the regulations will apply to you.

 

 

 

I only do the books for friends and family but they pay me for this service.

If you accept remuneration of any kind for your services the regulations apply.

 

 

 

I do the books for a charity and I’m not paid.  

If you do not receive remuneration of any kind for your services the regulations do not apply.

 

 

 

I do not practice in the UK

You must comply with the AML regulations of the country in which you practice.

 

 

 

I practice in the UK but none of my clients are based in the UK

The AML regulations apply to the place in which you carry out your business, not where your clients are based.

 

 

 

If you are still unsure whether you are considered to be an external bookkeeper (in practice) please contact the Compliance team at compliance@iab.org.uk  or phone +44 (0)1732 897750.

The advice above supersedes any guidance previously given by the Association.