Who needs AML supervision?

Who should be supervised?

Under Money Laundering Regulations 2017 businesses that are required to be supervised are: 

  • auditors who carry out statutory audit work;
  • accountants who provide accountancy services to clients;
  • tax advisers and consultants who provide advice to clients about their tax affairs;
  • payroll agents that provide accountancy services and/or tax advice;
  • customs practitioners, freight forwarders and similar businesses if they provide accountancy or tax services;
  • insolvency practitioners; and
  • trust or company service providers.

The scope of the regulations is broad and includes businesses in the UK which have cross-cross border models where day to day management takes place from UK registered office or UK head office.

Accountancy services include recording, review, analysis, calculation or reporting of financial information, and which is provided under arrangements other than a contract of employment.

Tax advisers include both direct and indirect provision of material aid, assistance or advice on someone’s tax affairs. This includes any specific tax advice given to clients, including completing and submitting tax returns, advice on whether something is liable to tax, or advice on the amount of tax due. Tax services remain within the scope of the Regulations even where they are provided virtually or through an automated service.

A trust or company service provider (TCSP) includes businesses which:  

  • form companies or other legal persons
  • act, or arrange for another person to act, as a director or secretary of a company
  • act, or arrange for another person to act, as a partner (or in a similar position) for other legal persons
  • provide a registered office, business address, correspondence address or administrative address for a company, partnership, or other legal person or arrangement
  • act, or arrange for another person to act, as a trustee of an express trust or similar legal arrangement
  • act, or arrange for another person to act, as a nominee shareholder for another person, unless the other person is a company listed on a regulated market which is subject to acceptable disclosure requirements.

A person is still considered to be a TCSP provider even if these services are provided incidentally to other accountancy services, or they are provided infrequently or on a one-off basis. 

Who does not need to be supervised?

You do not need to register for supervision if:

  • you provide audit, accountancy services, audit, tax, payroll, trust or company services on a non-commercial basis, that is for free or pro-bono;
  • give customers, or link to, the basic tax information that would be the same for everyone e.g. basic rate of income tax;
  • you provide software or hardware service support for bookkeeping, payroll and tax, as long as you don’t analyse or prepare any financial information or provide tax advice;
  • if you are a sub-contractor and/or all your clients are accountancy service providers or banks supervised by HMRC, or a professional body or by the FCA as long as all the points below are met:
    • you don’t do business directly with the accountancy service providers’ or banks end clients;
    • you are included in the accountancy service providers’ or banks anti-money laundering controls and procedures, suspicious activity reporting and training programmes; and
    • you have a written contract with each of your customers confirming that the arrangement and the contract meets all aspects of the money laundering requirements.  

If sub-contractors supplement a practice by providing services to their own clients, they will need to register for money laundering supervision as an accountancy services provider.

Who does the IFA supervise?

The IFA automatically supervises member firms. In accordance with the IFA Bye-laws, an IFA member firm means a sole practitioner, partnership, limited partnership or body corporate which is engaged in public practice where more than 50% of the rights to vote on all, or substantially all, matters of substance regarding the firm are held by members.

Accountancy firms that don’t meet the definition of a member firm can apply to the IFA for anti-money laundering supervision by emailing aml@ifa.org.uk. In order to apply, at least one partner, owner or director of the firm must be an IFA member, or the firm must be owned by a firm which has at least one IFA member. See supervision by the IFA for futher information.

You do not need to be supervised by the IFA if:

  • you are already supervised for Money Laundering Regulations by a professional body included schedule 1 of the regulations;
    • you are supervised by HMRC; or
    • all your customers are themselves supervised by HMRC, or a professional body or the FCA.

For the Money Laundering Regulations, the main supervisory bodies for accountants, bookkeepers and tax advisers are:

  • Association of Accounting Technicians
  • Association of Chartered Certified Accountants
  • Association of International Accountants
  • Association of Taxation Technicians
  • Chartered Institute of Management Accountants
  • Chartered Institute of Taxation
  • Financial Conduct Authority
  • Institute of Certified Bookkeepers
  • Institute of Chartered Accountants in Ireland
  • Institute of Chartered Accountants in Scotland
  • Institute of Chartered Accountants of England and Wales
  • Institute of Financial Accountants
  • International Association of Bookkeepers
  • Law Society