Accountants fined £99k for breaking AML rules

Accountants fined £99k for breaking AML rules

Apr 8, 2024

Tax advisers and accountancy firms have been fined £98,870 for breaches of anti money laundering (AML) regulations with just one company appealing the fine

The latest HMRC report on businesses that failed to comply with anti-money laundering (AML) regulations from 1 April 2023 to 30 September 2023 showed that 408 businesses were fined £2,277,893 with charges ranging from £1,350 to a maximum penalty of £52,000.

Property company Flynn Johnson Estates from Surbiton topped the list with a £52,000 penalty for failing to apply for registration at the required time and did not appeal.

There were 21 accountancy firms on the list amounting to £78,870 in penalties with a further six tax advisers also fined £20,000 worth of penalties.

Wrights Accounting Services in Westgate received the largest fine, amounting to £12,500 for three breaches for failures in appropriate staff training and conducting due diligence.

Accounting Hut (New Forest) was given the second highest penalty charge of £5,900 and also did not appeal the charge for failing to apply for registration in due time.

AWB Accountancy and Taxation, in Hockley Essex, was on the list for the same issue, receiving a penalty of £3,970. The company did not appeal. Additionally, Accounting Solutions (Sussex) received a penalty of £4,500 and also chose not to appeal.

Martin Cheek, lawyer and managing director of SmartSearch said: ‘There are a significant number of accounting firms on the list, and most of them are being handed penalties for failing to apply for registration at the required time.

‘All accountancy firms or individual accountants must register with HMRC before carrying out any activities, so their AML compliance can be monitored.

‘Usually, no penalty will be charged if all reasonable steps are taken to ensure compliance with the registration requirement, which means in these cases, it’s likely the reasonable steps weren’t taken.’

The majority of companies were penalised for not being on the trust and company register, meaning they are in breach of Regulation 56 which states: ‘Any business that performs trust and company service work when not on the register may be subject to disciplinary action or civil or criminal sanctions imposed by HMRC.’

The penalties are calculated ‘in accordance with the framework for the relevant breach’, then the degree of culpability of each officer needs to be taken into account to establish the amount of the penalties.

Only one company, Giles Edwards Yorkshire Property estate agents, appealed their fine of £7,000 for failing to apply for registration at the required time.

A total of 10 art galleries featured on the list with a total of £37,750 of fines. Simon Lee Gallery in London received the highest penalty of £15,600.

Cheek added: ‘Regulations can be hard to keep on top of, whether you are a small accountancy practice or large financial organisation, as well as professionals working alone – these regulations apply to all.

‘But clients and regulators are looking for higher standards of accountability from accountants to combat money laundering, so they may need additional training, to hire a dedicated compliance officer, or to implement and improve internal controls and processes.’