Money laundering considerations

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Money laundering considerations
  • Introduction
  • Tax offences generally
  • Tipping off
  • Civil offences
  • Reluctance to correct past errors
  • Tax evasion
  • The privilege reporting exemption
  • New clients / review of existing clients
  • EU payments regulation
  • More...

Money laundering considerations

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant tax changes associated with Brexit began to take effect. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — impact for UK companies guidance note.

This guidance note gives an overview of the obligations imposed on tax advisers in relation to money laundering offences. For more details, see Simon’s Taxes Division A7.1.

Introduction

All businesses that are covered by the Money Laundering Regulations 2017 have to put in place suitable anti-money laundering controls. The 2017 regulations replaced the previous 2007 regulations with updated provisions that essentially represented an evolution of the regime and reorganisation of the structure. They took effect from 26 June 2017, having been formally laid before Parliament on 22 June 2017. This consequently gave advisers very little time in which to prepare for the new regulations although they had been widely consulted on.

Broadly, the 2017 regulations are more prescriptive in the risk assessment and record keeping requirements. There were no wholesale radical reforms. The key differences that may be of practical significance to tax advisers include:

  1. tightening up the general risk assessment requirements ― requiring specific issues to be considered and risk mitigation policies to be documented in writing

  2. a higher level of customer due diligence, particularly in relation to corporate clients, those resident in ‘high risk’ countries and those involving ‘politically exposed persons’

The regulations apply to different business sectors, including accountants. Businesses that are covered by the regulations must be monitored by a supervisory authority, for example a professional body. If a business is not covered by a supervisory authority, it may have to register with HMRC. For more information, see the HMRC guidance on Money Laundering Supervision for

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