Economic Crime Supervision Handbook

ECSH63330 - Regulation 11 - Auditors and others

Category Heading	Category Heading
The Law	Regulation 11 - Auditors and others
What it means	An explanation of the terms for "auditor", "insolvency practitioner", "external accountant" and "tax adviser".  Remember the industry common term "Accountancy Service Provider" or "ASP" is not stated anywhere in the legislation.
Purpose	A relevant person/business needs to know if it falls within the scope of the Regulations.
Time Line	These were defined in MLR 2007;  Regulations 3(1)(c), (4), (5), (6), (7) & (8).   ASPs were originally required to register by 01/10/2008, but this requirement was extended to 01/01/2009.  Reg 11(1)(d) was extended on 10/01/2020, with a date to register for the business caught by the extension as 10/01/2021.
What to establish	11(a) - definition of "auditor" 11(b) - definition of "insolvency practitioner" 11(c) - definition of "external accountant" 11(d) - definition of "tax adviser" To establish that the ASP falls within one of the above categories. All ASPs should be supervised by one professional body (PB) (very limited exceptions to this). Larger ASPs may have individual partners who are supervised by their own differing PBs, so they will elect for the business to be supervised by one of them, or even chose HMRC as the default supervisor. HMRC is the ASP default supervisor if the relevant person/business is not supervised by another PB. See MLR2017 - Schedule 1 for a current list of Treasury approved Professional Bodies
How to test compliance and evidence to obtain	More detail can be found in the GOV.UK Registration guidance and the CCAB Guidance (links below in Further Reading). In general, if a relevant person/business is supplying tax advice, by way of business then they should be registered.  This includes professional bookkeeping services, accounts preparation, helping with submitting tax returns or claims and payroll services.  (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Best practice	Sector specific information:
AMP	N/A
ASP	You would expect most ASP customers to be face to face customers, but there may be non face-to-face customers and this should be taken into account when the business completes its risk assessment of that customer and be able to demonstrate that to you and how they have been able to verify the customers identity.
EAB	N/A
LAB	N/A
HVD	N/A
MSB	N/A
TCSP	There are a number of businesses that supply services which fall within the scope of the regulations under both ASP and TCSP sectors.  If a business supplies services under these two sectors it should register declaring both sectors it operates under, with its supervisor.
Futher Reading	MLR2017 - Schedule 1  Section 4 of the Local Audit and Accountability Act 2014 Section 388 of the Insolvency Act 1986   Article 3 of the Insolvency (Northern Ireland) Order 1989  GOV.UK Guidance - Money Laundering Regulations-Accountancy Service Provider Registration GOV.UK guidance on Sector specific Risk Assessments  CCAB AML Guidance 2020  National Risk Assessment Dec 2020  Risk based approach - Regulation 18  Policies, controls and procedures - Regulation 19  Customer due diligence measures - Regulation 28
FAQs	Q: The ASP advises it does not need to be (or no longer needs to be) registered.  A: Ask the business to put its case in writing, confirming that it is no longer undertaking any relevant activity.  Q: The ASP advises that it allows its clients to utilise the ASP's address as the client’s registered office. Does this fall within the realms of TCSP and do they need to be registered as a TCSP? A: Per the Regulations, the provision of a registered office is a relevant activity and therefore the ASP should register as a TCSP.  Q: The ASP advises that it allows its clients to utilise the ASP's address as their registered office.  Does this fall within the realms of TCSP and do they need to be registered as TCSP? A: Per the regulations, the provision of a registered office is a relevant activity and therefore the ASP should register as a TCSP, although there are caveats. If the ASP is not charging specifically for allowing its clients to utilise its office as a registered office, then it is not undertaking relevant activity by way of business for this purpose and need not register as a TCSP.  Please note this is specific to this query, if the ASP is also undertaking other relevant activity, such as creating a company for its client then this falls within TCSP relevant activity and the ASP should be registered.  A Firm of Solicitors is assisting its clients in employment law, such as redundancy or HR issues.  There are likely to be tax implications and therefore the 'firm' should register for supervision (as from 10 Jan 2021).  The Solicitors Regulation Authority (SRA) also consider this type of activity to be undertaking relevant activity. Links to the SRA guidance are in the Knowledge Library within the ASP Sector guidance page.