Are your accounts staff legal?

Rupert White Posted By Rupert White
from Burlington Media Group

In the current climate of cost reduction firms may find that they are breaking the law by using the services of accountancy staff who are working illegally.

From 15 December 2007 Accountancy Service Providers (ASPs) must have money laundering controls in place and register with H M Revenue & Customs (HMRC) unless they are already supervised for compliance with the Money Laundering Regulations 2007.

To be classified as "already supervised" the ASP must be a member of a professional body listed in the MLR 9 Registration Notice, appendix 1. Bodies listed under that appendix include (but are not restricted to) Institute of chartered Accountants in England and Wales, Association of Accounting Technicians, Chartered Institute of Management Accountants, Institute of Financial Accountants, Institute of Certified Bookkeepers.

Employees of firms who are on the payroll do not need to register as they are regulated within the firm by the Solicitors Regulation Authority but for those contracting out their accountancy and related services failure to comply could have serious consequences.

Firms would be well advised to revisit their insurance documents - professional indemnity and office policies - to ensure that the proposal forms have been correctly completed, failure to ensure compliance under the appropriate regulations could have consequences in the event of a claim.

Businesses covered include:

  • accountants
  • auditors
  • tax advisers
  • bookkeepers
  • payroll agents
  • tax consultants
  • customs practitioners
  • interim managers undertaking any of the activities of the businesses listed above

So if you find yourself needing emergency cover (interim manager) and call upon a retired accountant who you knew a few years ago then you could well be using the services of someone who is working illegally because they are not currently registered or supervised.

Practitioners should also bear in mind that this does not apply only to the legal profession, so if you have an offshoot business - such as an estate agency - and contract the relevant services to freelance personnel then they will still need to be regulated.

HMRC issued an update on 31 December 2008 stating "if you are in business as an Accountancy Service Provider and are required to register with us under the Money Laundering Regulations 2007 you are trading illegally if you missed the deadline of 1 January 2009 and may be liable toa penalty or criminal prosecution".

Geoff Smith - MICB, CB Cert, Certified Bookkeeper

Email -

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Contact - 01708 509911 or 07961 365169

Geoff Smith is principal of GCS Professional Services, having worked within the profession since 1979 and has provided freelance services since 1999 including one day "best practise" audits to assist firms keep up to date with accountancy and administrative regulatory issues.

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