Submit HMRC AML supervision evidence now or face code suspension, warns the IFA

3 February 2022

The Institute of Financial Accountants (IFA) has warned its members that they risk having their tax agent codes revoked by HMRC should they fail to provide up to date documentation concerning anti-money laundering legislation (AML). 

This comes as a number of agents were suspended by HMRC in December and their tax codes invalidated,for failure to provide evidence on time; something which HMRC reserves the right to do without further warning. This is being labelled as potentially “disastrous” for accountants and their clients, preventing them from filing self-assessment returns,alongside larger workloads, in the run-up to the deadline. 

“We have been made aware that some members have had their tax agent codes suspended even though they have supervision with the IFA”, said John Edwards, CEO of the IFA. This means that firms have been unable to file any returns on behalf of their clients until the codes have been re-instated which can take five working days or more.   

HMRC now insists on documentary evidence as proof of supervision for all tax agents.Accountants have been made aware of this via a letter from HMRC, asking them to complete and return a form with details of their firm and supervisor. They must alsosend evidence that they are a member of a Schedule 1 professional body and that their membership includes AML supervision.    

Edwards urges: “If you receive a letter from HMRC, do not ignore it. Make sure that you return the completed form along with the required information to the address provided immediately. Having tax codes suspended can be hugely frustrating at the best of times, but now with tax season in full swing, it could be disastrous for your firm and your clients. Membership of the IFA constitutes appropriate supervision, but you must still provide evidence of that supervision and we are unable to do this on your behalf. In this instance, HMRC is immediately revoking tax agent codes due to the high risk of money laundering crimes, so it is essential you act immediately. 
 
Should codes get suspended, agents are being advised to get in touch with the compliance team at compliance@ifa.org.uk.     
 

Notes to editors: 

Established in 1916, the Institute of Financial Accountants (IFA) is part of the Institute of Public Accountants (IPA) of Australia Group, the world’s largest SME-focused accountancy group, with 46000 members and students in 80 countries.www.ifa.org.uk. 

Our members work within micro and small to medium-sized enterprises (SMEs) or in micro and small to medium-sized accounting practices (SMPs) advising micro and SME clients.