Important Service Update
We are required to inform you of this service upgrade.
The Smart Search platform upgrade is coming soon!
In response to feedback, and as part of their commitment to continuous improvement, SmartSearch is pleased to announce that we will shortly be upgrading your platform. Continue reading “Smart Search platform upgrade”
Tax Fraud Investigations
HMRC has confirmed it is investigating 153 suspected ‘enablers of tax evasion’, including both regulated and unregulated tax advisers.
Cracking down on ‘enablers of tax evasion’ has been a key area of focus for HMRC since it established its Fraud Investigation Service in 2015. Continue reading “HMRC probes 153 people suspected of aiding tax evasion”
New Service – Customer Verification Biometric Facial Recognition
Under COVID-19 social distancing rules, many prospective clients are no longer able to present their documents in person, while sending them through the post brings a whole new set of issues. With continuing restrictions on personal in place to stop the spread of coronavirus means firms that rely on paper-based ID checks are facing huge business disruption.
Not only is it now almost impossible to get to a post office under the new rules, but sending physical documents also risks contamination. And with so many people now working from home, there is the added risk associated with sending sensitive personal data to the home addresses of staff. Continue reading “Customer Verification Biometric Facial Recognition”
Money Laundering (Amendment) Regulations 2019
On 10 January 2020 changes to the Government’s Money Laundering Regulations came into force. They update the UK’s AML regime to incorporate international standards set by the Financial Action Task Force (FATF) and to transpose the EU’s 5th Money Laundering Directive. Specific changes to the regulations that may affect your business include the following categories:
New Obliged Entities
- regulation 11(d) provides an expanded definition of what a tax adviser is, which means anyone who provides support with tax matters will now come under the definition of an accountancy service provider.
- regulation 13 (3) to (7) defines letting agency businesses.
- regulation 14 defines what an art market participant is and what a ‘work of art’ is.
Compliance under MLRs
- regulation 19 means that businesses need to carry out a money laundering risk assessment of new products, business practices, or technologies before they implement them.
- regulation 20 sets out requirements in respect of business group-wide policies on the sharing of information about customers, customer accounts, and transactions for money laundering/terrorist financing purposes.
- regulation 24 agents of money service business principals who are delivering the regulated business must receive relevant training from their principals.
- regulation 26 (7)(b) sets out requirements to ensure individuals convicted of relevant offences do not act in key roles in regulated firms.
- regulation 27 requires art market participants to apply customer due diligence measures on all transactions of 10,000 euros or more regardless of payment method.
Customer due diligence
- regulation 27 sets out requirements for relevant persons to apply customer due diligence measures where there is a legal duty under the relevant international tax compliance regulations, or a duty to review information relevant to the risk assessment or beneficial ownership of the customer.
- regulation 28 sets out requirements for measures to be taken to understand the ownership and control structure of persons, trusts and companies as a customer, and to verify the identity of senior managing officials responsible for managing corporate bodies, particularly when the beneficial owner cannot be identified.
- regulation 28 sets out circumstances in which information may be regarded as being reliable and independent of the person providing it where it has been obtained by means of an electronic identification process.
Reporting discrepancies to Companies House
- regulation 30(a) sets out a requirement to check trust and company beneficial ownership registers before establishing a business relationship, and to report any discrepancies found to Companies House.
- regulation 33 sets out requirements to apply enhanced due diligence, explains what a ‘relevant person’ is, and what ‘being established’ means.
- regulation 33 extends the factors a responsible person must consider when assessing the risk of money laundering to include whether the customer is third country national applying for residency rights in an EEA state.
- regulation 33 extends ‘risky’ products to include oil, arms, precious metals and tobacco.
E-money thresholds for customer due diligence (CDD)
- regulation 38 reduces the threshold for which low risk electronic money products can be exempt from customer due diligence from 250 euros to 150 euros.
Registration with HMRC
regulation 56 explains that money service business and trust or company service businesses who apply to register from 10 January 2020 will not be able to carry out relevant activity until they are registered with HMRC
Fifth Money Laundering Directive
This latest directive revisits certain areas of the Fourth Directive to further strengthen transparency and counter-terrorist provisions. The requirements of 5MLD must come into effect through national law by 10 January 2020 in line with Article 4 of the 5MLD.
The Fifth Directive introduces a number of elements to strengthen the UK Regime;
- New obliged entities
- Electronic money
- Customer Due Diligence (CDD)
- Obliged entities: beneficial ownership requirements
- Enhanced Due Diligence
- Politically Exposed Persons
- Mechanisms to report discrepancies in beneficial ownership information
- Trust Registration service
- National register of bank account ownership
- Reporting by Treasury
- Pooled client accounts Continue reading “Implementation of the Fifth Money Laundering Directive”
Failure to report on PSC register risks criminal prosecution
Since 26 June 2017 Companies House has been contacting, usually by formal letter, those individuals and companies who have not complied with the PSC Regulations.
Now harsher action is to be taken as it is a criminal offence not to comply with the new transparency of ownership rules.
This next phase to ensure that individuals and companies comply with the new regulations this means Companies House will pass on details of potential criminality to the Insolvency Service’s Criminal Enforcement Team, to investigate offences under Part 21A of the Companies Act on behalf of the Department of Business, Energy and Industrial Strategy (BEIS), and issue criminal proceedings where appropriate.
The requirements to keep a PSC register are set out in Part 21A of the Companies Act 2006.
A person with significant control (PSC) is someone who owns or controls a company, and is also known as ‘beneficial owners’. Most PSCs are likely to be people who hold more than 25% of shares in the company, more than 25% of voting rights in the company and have the right to appoint or remove the majority of the board of directors.
The Register of People with Significant Control Regulations 2016 (PSC) was introduced in April 2016. It requires all UK companies (including charitable companies and subsidiaries of exempted companies) and limited liability partnerships (LLPs) and certain Scottish partnerships to keep a PSC register, and people who control companies or other relevant entities will be subject to a disclosure requirement.
Around 98.5% of companies have complied with PSC regulations, Companies House confirmed. There are still around 50,000 companies flouting the rules.
A new watchdog launches 18 January 2018 to strengthen the UK’s defences against money laundering and terrorist financing.
The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is a new regulator set up by the government to strengthen the UK’s anti-money laundering (AML) supervisory regime, it is based within the FCA and will work with and ensure all the UK professional body AML supervisors provide consistently high standards of AML supervision and with law enforcement to strengthen cooperation. Continue reading “OPBAS Launches professional body supervision”
In the budget speech the Chancellor announced further measures to tackle professional enablers of tax avoidance and evasion.
The government is investing a further £155 million in additional resources and new technology for HMRC. This investment is forecast to help bring in £2.3 billion of additional tax revenues by allowing HMRC to tackle tax leakage through avoidance and evasion.
In particular, the resource is earmarked for further tackling those who are engaging in marketed tax avoidance schemes, enhancing efforts to tackle the enablers of tax fraud and hold intermediaries accountable for the services they provide using the corporate criminal offence and increasing HMRC’s ability to tackle non-compliance among mid-size businesses and wealthy individuals.
Steve O’Neill will be presenting the following anti-money laundering training sessions during November 2017. The talk will include topics such as;
- What’s new in the 2017 Regulations
- The new corporate offence of ‘a failure to prevent the facilitation of tax evasion’
- The proposed new supervisory regime for professional bodies
The venues and professional bodies are;
- 21 November 2017 AAT Leicester Branch at 6pm
- 29 November ICAEW Southport Branch at 5.15
For further details of the events please contact the relevant professional body
People with Significant Control (Amendment) Regulations 2017
The Government enacted the legislation necessary to implement changes required by the Fourth Money Laundering Directive to the UK regime for the disclosure of people with significant control (PSCs). Two sets of amending regulations were made at the last minute, both of which came into force on 26 June 2017.
- the Information about People with Significant Control (Amendment) Regulations 2017 (SI 2017/693); and
- the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 (SI 2017/694).
Both sets of regulations were laid before Parliament on 23 June, just three days before they came into force. Continue reading “People with Significant Control (Amendment) Regulations 2017”