We are registered for MLR compliance with the ATT.
This article is relevant to those people providing bookkeeping services to accountants.
This information is taken from Mark Lee’s weekly practical tax newsletter, published by the Tax Advice Network, for which you can subscribe at www.TaxAdviceNetwork.co.uk.
Anyone who provides accountancy or tax services needs to be either supervised by a professional body for money laundering regulations (MLR) compliance, or registered with HMRC under the MLR. The MLR registration with HMRC is not the same as registering as a tax agent to submit tax returns, it is a completely separate process. However, the two registration lists held by HMRC are compared at regular intervals, as Mrs Houghton found out.
Mrs Houghton started her bookkeeping business on 6 April 2008, which was coincidentally the month when registration under MLR became a requirement for all accountancy service providers. In fact the deadline for accountants to register under MLR with HMRC (if they weren’t supervised by another body) was extended to 1 January 2009.
Mr Houghton registered as a tax agent for self-assessment with HMRC in November 2009, and for VAT services in March 2010. However, it took HMRC until 24 September 2012 to realise that she wasn’t registered under MLR, and asked her to register. She submitted her application to register on 10 October 2012, but still received a penalty of £921.54 for late registration and missed MLR registration fees!
The Tax Tribunal agreed with HMRC, that Mrs Houghton should have been aware of her obligation to register with HMRC for MLR purposes, and upheld the penalty.
If you work with independent bookkeepers who bring your clients’ records up to scratch before you complete the accounts and tax return, remind them of their obligations under the MLR. The MLR registration guide has recently been updated, and makes it clear that where payroll functions are provided for third parties the provider will normally be classified as an accountancy service provider and will be required to register under the MLR.
Christine Houghton v HMRC TC03096